Euro-Zone Inflation Hits Three-Year High, ECB Rate Hike Odds Rise

The European Central Bank's (ECB) case for another interest-rate hike has been strengthened after data revealed that euro-zone consumer inflation accelerated in August to its highest level in three years.

The euro zone's consumer price index rose 3.3% from a year earlier in August, up from 2.9% in July and marking the highest level since September 2023.

This increase has led markets to assign a higher probability to a 25-basis-point increase in the ECB's key rate on September 10, with financial markets having already largely priced in this move.