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Britain on Tuesday published legislation to introduce tougher sanctions on Iran, expanding trade restrictions and powers to target ships as part of what it described as wider effort to curb Tehran's nuclear programme and other hostile activities.

The European Central Bank is widely expected to raise interest rates again on September 10, taking its deposit rate to 2.50%. The decision itself is hardly controversial: all 65 economists surveyed by Reuters between August 31 and September 3 predicted a 25-basis-point increase.

The European Central Bank is widely expected to hike interest rates on Thursday, erring on the side of caution as the U.S.-Iran wardrags on, keeping oil prices high and raising inflation again.

Focus in the coming week will center firmly on U.S. inflation data as investors gauge whether the Federal Reserve could raise interest rates in the coming months, and possibly as early as this month.

Economists think the European Central Bank will raise interest rates next week but not beyond that. The majority of respondents in a Bloomberg survey expect the deposit rate to be raised by a quarter-point to 2.5% on Thursday and stay there through 2027.