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ECB June Rate Hike Hinges on Energy Prices, Geopolitical Developments

The European Central Bank's plans to raise interest rates in June face mounting uncertainty. Policymakers await signals on energy costs and geopolitical tensions.

ECB President Christine Lagarde has signaled the central bank will consider a rate increase at its June meeting, though the decision remains contingent on economic conditions. Bundesbank President Joachim Nagel indicated a hike is necessary unless the economic outlook improves substantially.

ECB officials say they are likely to proceed with a rate increase unless there are positive developments on energy prices and resolution of the Iran conflict. Both factors weigh heavily on inflation expectations across the eurozone.

The tentative approach reflects policymakers' caution about tightening monetary policy amid persistent uncertainties. Final guidance is expected as the June meeting approaches.