European Central Bank expected to raise interest rates to tackle inflation

The European Central Bank is expected to raise interest rates in December in an effort to curb soaring inflation.

The bank's Governing Council is scheduled to hold its next monetary policy meeting on December 17.

Eurozone policymakers have already raised key interest rates twice this year in response to rising inflation and higher energy prices.

At their meeting last week, they kept the deposit rate unchanged at 5.2%. Raising key interest rates increases borrowing costs, which can reduce demand and help contain inflation. However, higher rates can also burden potential investors, potentially slowing economic activity.

In September, consumer prices in the eurozone rose by 8.3% compared to the same month last year, marking the highest level in three years.

The European Central Bank aims for a medium-term inflation target of 2.0% in the eurozone, which now includes 21 countries.