FRANKFURT: After raising interest rates for the first time in over a decade at their last meeting, European Central Bank (ECB) policymakers are poised to deliver another record hike on Thursday in a show of determination to tame soaring inflation.

Steep increases in energy prices in the wake of Russia's invasion of Ukraine on February 24 have heaped pressure on households and sent the pace of consumer price rises to new highs.

This July 21, 2022 file photo shows the European Central Bank sign at its headquarters in Frankfurt am Main, western Germany. AFP PHOTO
This July 21, 2022 file photo shows the European Central Bank sign at its headquarters in Frankfurt am Main, western Germany. AFP PHOTO

Eurozone inflation hit 9.1 percent in August, a record in the history of the single currency and well above the ECB's 2-percent rate target.

The "only question" for the central bank's meeting was "whether it would be a 50- or 75-basis-point hike," said Carsten Brzeski, head of macro at the ING bank.

Speaking at the annual symposium of central bankers and finance chiefs at Jackson Hole, Wyoming at the end of August, ECB board member Isabel Schnabel said her bank needed to show "determination" to tame price rises.

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Under this approach, the ECB would respond "more forcefully to the current bout of inflation, even at the risk of lower growth and higher unemployment," she said.

The ECB's 25-member governing council surprised with a 50-basis-point hike at its last meeting in July, bringing an end to eight years of negative interest rates in one fell swoop.

In her speech at Jackson Hole, Schnabel stressed the need for the people to "trust" that the ECB would restore their purchasing power.

The Frankfurt, Germany-based institution is already playing catch up with its American and British counterparts that started raising rates harder and faster in response to inflation.

So-called forward guidance issued by the ECB, which limited its scope for action, has been ditched. Policymakers would now take their decisions "meeting by meeting," the ECB President Christine Lagarde announced in July.

With that, the door has been opened for the central bank to follow in the footsteps of the Federal Reserve and raise rates by 75 basis points.

Following August's red-hot inflation numbers, the influential head of Germany's central bank, Joachim Nagel, said the ECB needed a "strong rise in interest rates in September."

"Further interest rate steps are to be expected in the following months," the Bundesbank president predicted.

But ECB chief economist Philip Lane has counselled colleagues to follow a "steady pace" of interest rate increases.

Hiking at a rate that was "neither too slow nor too fast" was important due to the "high uncertainty" around the economy and the future path of inflation.

Alongside its policy decisions, the ECB will also share an updated set of economic forecasts for the eurozone.

In its last estimates, published in June, the ECB expected inflation to sit at 6.8 percent in 2022 before falling to 3.5 percent next year, while growth would slow from 2.8 percent this year to 2.1 percent in 2023.