Recent energy price surges tied to Middle East developments have driven upward revisions to euro-area inflation forecasts, with professional forecasters now expecting 3.0% headline inflation in 2026 and 2.6% in 2027. The ECB held its deposit rate at 2.50% in late October while signaling a data-dependent path that includes a likely December hike, reflecting upside risks to prices and stable underlying inflation. Resilient near-term GDP growth alongside tighter financing conditions from higher bond yields support trader expectations of limited further tightening by March 2027. Market-implied probabilities currently show near-even odds between no additional change and one more 25 basis point increase by that meeting, consistent with the balance of incoming inflation and growth data through early 2027.