Euro Zone Inflation Rises Amid High Energy Costs and Interest Rate Hikes

Finnish central bank chief Olli Rehn has warned that rising energy prices are pushing euro zone inflation closer to the European Central Bank's 'adverse' scenario. Inflation has risen above 3% in recent months and could approach 4% by year-end, twice the ECB's target.

This increase in inflation pressure is a concern for the ECB, which may need to raise interest rates further after two hikes this summer.

However, Rehn also noted that surging long-term interest rates are likely to weigh on economic growth and limit the impact of higher energy costs on other prices and wages.