The European Central Bank is expected to keep interest rates unchanged at its meeting on Thursday, preferring to wait and assess the economic repercussions of the renewed confrontation between the United States and Iran, at a time when the surge in oil prices has brought back concerns about inflation and the potential need for further monetary tightening.

Market and analyst expectations indicate that the bank will keep the deposit facility rate at 2.25 percent, following its hike in June, a level that officials currently consider appropriate while monitoring the impact of geopolitical developments in the Middle East on the European economy.

The ceasefire agreement following the June meeting, along with the slowdown in inflation to 2.8 percent that month, had boosted hopes that the worst wave of inflation was behind the euro zone. However, the renewed fighting and the return of oil prices to above $90 a barrel have revived expectations of a possible rate hike in the coming months.

Investor attention is shifting to the press conference held by European Central Bank President Christine Lagarde following the announcement of the decision, looking for any signals regarding the September meeting and whether the bank still leans toward implementing an additional interest rate hike.

Although Lagarde has consistently emphasized that the bank's decisions depend on economic data and that each meeting is assessed independently, any hint of a continued tightening approach could reinforce market bets on a new hike in September.

The majority of economists surveyed by Bloomberg expect the bank to raise interest rates one more time in September before beginning to cut them in about a year, while markets price in the likelihood of two additional hikes by February 2027.

These expectations come despite the improvement in a number of economic indicators, as confidence surveys showed the continued resilience of the euro zone economy, while inflation slowed more than expected during June, with price pressures easing in the services sector as well as core inflation, which excludes food and energy.

Nevertheless, the risk of a return of inflation remains in light of rising energy prices. Some economists fear that sustained high oil prices could anchor inflation expectations and lead to what is known as 'second-round effects', when energy price increases spill over into wages and the rest of goods and services.

Although monetary policymakers have not yet observed clear signs of this scenario, Lagarde may face questions regarding the bank's assessment of the new risks and the extent to which the economy has deviated from the baseline scenario upon which June's forecasts were built.

Alongside monetary policy, speculation regarding Lagarde's future is expected to take up part of the press conference, amid ongoing talk about the possibility of her leaving her post before the end of her term in October of next year.

Lagarde had acknowledged in a recent interview that she considered leaving the post in February, when inflation was approaching the bank's 2 percent target, before the war altered the economic landscape.

She also recently announced her intention to participate in the upcoming French election campaign in support of the European project, while confirming at the same time that she does not intend to run for any political office, as speculation persists regarding the possibility of her leading the World Economic Forum in the future.

Lagarde's statements this time take on special importance, not only for charting the course of European monetary policy, but also for assessing the extent of the impact of the war in the Middle East on inflation and growth, at a time when uncertainty in the global economy is increasing.