The European Central Bank is expected to raise its policy rate to 2.50% from 2.25% on Thursday, its second increase this year, as attacks in the Iran war drive oil and gas prices higher and threaten to prolong inflation in the euro zone, the 20-country single-currency bloc. Economists expect ECB President Christine Lagarde and her colleagues to signal that further tightening remains possible if the inflation outlook fails to improve. Recent growth data, faster bank lending in July and the economy's resilience despite higher fuel costs, Chinese competition and droughts give policymakers room to tighten further. The ECB is also expected to lift its growth projections for this year and possibly 2027, while delaying the return of inflation, now above 3%, to its 2% target beyond the timeline set in June for next summer. Core inflation, which excludes energy and food, eased to 2.4% last month, but Barclays analysts said pressure was building in core goods and producer prices. Financial markets are pricing two or three more rate increases by the end of next year. Lagarde is also likely to face questions about her tenure, scheduled to run until October 31, 2027, amid speculation about a possible role at the World Economic Forum and a potential leadership reshuffle at the ECB.