Eurozone inflation hits 3-year high at 3.3% in August

Eurozone inflation surged to a three-year high of 3.3% in August, driven by soaring energy costs due to the ongoing war in the Middle East, according to official EU data released on Tuesday. This marks a significant increase from the 2.9% recorded in July and aligns with analysts' forecasts. Energy prices alone saw a 14.3% rise in August, following a 10.3% jump in July, primarily due to the US-led military action against Iran and the near-complete closure of the Strait of Hormuz, a crucial energy trade route.

The European Central Bank (ECB) is anticipated to raise interest rates during its meeting on September 10 to combat the price surge, after pausing in July. ECB President Christine Lagarde had cautioned in July that the energy shock resulting from the conflict could worsen further. Core inflation, which excludes volatile energy and food prices, has remained relatively stable, with August's rate falling back to 2.4% from 2.5% in July. Food and drink prices remained unchanged at 1.2% in August compared to the previous month.