The European Central Bank kept interest rates unchanged on Thursday but left the door open for further monetary tightening in the coming months, as tensions escalate in the Middle East and energy prices rise anew.

The bank kept the deposit rate at 2.25 percent, while stressing that it 'is closely monitoring the magnitude and duration of the energy shock, as well as its indirect and second-round effects on inflation,' according to Reuters.

In a statement, the bank said that 'energy price projections remain highly volatile, but are currently close to the baseline scenario in the Eurosystem staff macroeconomic projections for June, and are still significantly higher than before the outbreak of the conflict in the Middle East.'

It added that 'uncertainty remains high, and the full inflationary impact of the energy price shock has not yet become clear.'

Financial market expectations point to the possibility of two additional interest rate hikes by the end of the year, the first of which would come at the European Central Bank's meeting scheduled for September 9-10.

The European Central Bank had raised interest rates for the first time in nearly three years at its June meeting, but a series of positive data on inflation, wages, economic activity, and price expectations since then has eased pressure for a quick new move and prompted policymakers to adopt a more cautious approach.

Under Thursday's decision, the bank also kept the marginal lending facility rate at 2.65 percent and the main refinancing operations rate at 2.40 percent.