Euro Zone Inflation Hits 3.3% as ECB Nears 25-Basis-Point Rate Hike
Updated
Updated · CNBC · Sep 1
Euro Zone Inflation Hits 3.3% as ECB Nears 25-Basis-Point Rate Hike
3 articles · Updated · CNBC · Sep 1
Summary
Euro zone headline inflation rose to 3.3% in August from 2.9%, a Eurostat flash estimate showed, pushing price growth back above 3% for the first time since September 2024.
Energy inflation jumped to 14.3% from 10.3% as the Iran war and the Strait of Hormuz blockage lifted oil and refined-product costs and disrupted Europe's gas market.
Markets priced a 98.9% chance on Tuesday that the ECB will raise rates by 25 basis points to 2.5% at its Sept. 10 meeting, after a June increase to 2.25%.
Core inflation still eased to 2.4% from 2.5%, but policymakers risk treating the energy shock as temporary if it spills into wages and services prices.
Higher borrowing costs would add pressure on indebted households, housing markets and small businesses, with some SMEs likely to delay or scrap investment plans.