Nordea sees an increasing likelihood that the European Central Bank (ECB) will raise interest rates at its September meeting as underlying inflation remains slow to ease and negotiated wage growth stays above levels consistent with the ECB’s 2% target. Investors were pricing roughly a 60% chance of a 25-basis-point increase at the September 14 meeting, according to Refinitiv data. A hike would lift the deposit rate to 4.00%, its highest level since the euro was introduced, raising borrowing costs across the 20-nation euro area while potentially strengthening the euro and improving savings returns. It could also push government bond yields higher and add to economic weakness after the euro area barely grew in the second quarter. Nordea’s view contrasts with expectations from UBS and Goldman Sachs, which anticipate a pause after the July increase. The final decision will depend on incoming data, including August inflation figures due at the end of the month.