Economists indicate that the European Central Bank is likely to hold rates steady next week to evaluate the inflation situation, with a final interest rate hike expected in September.

A Bloomberg survey reveals unanimous predictions that borrowing costs will remain unchanged this coming Thursday. Most respondents forecast a 0.25 percentage point increase in the deposit rate to 2.5% in September, when policymakers will have access to the latest quarterly projections.

Following a surge in oil prices triggered by conflict in Iran, which spurred the worst inflation in the euro area since 2023, economists widely anticipate the ECB will halt its monetary policy tightening at that level.

However, consistent with signals from the ECB itself, analysts are not entirely certain, given the rapidly evolving situation in the Middle East—which has shifted from a fragile ceasefire to renewed conflict over the past month.

"The crucial question now is whether the renewed escalation of U.S.-Iran tensions is merely temporary," stated Dennis Shen, a lecturer at the International Management Institute of the Technical University of Berlin. If the situation is contained, "it would support keeping rates on hold," but a further deterioration "could trigger second-round effects and put pressure on inflation expectations."

A rate hike in September could reinforce the European Central Bank's position as the most hawkish central bank among the Group of Seven nations. Last month, it became the first G-7 central bank to raise interest rates following the outbreak of the Iran conflict.