Euro Zone Inflation Surges Past 3% as Energy Prices Soar

Europe's inflation rate has climbed back above 3% in August, hitting 3.3%, according to Eurostat data.

The European Central Bank pushed its key deposit rate up by 25 basis points to 2.50%, a move that signals the end of cheap borrowing costs.

The surge in inflation is primarily driven by energy shocks fueled by conflict in the Middle East, where crude oil prices have surged past $105 per barrel due to disruptions in shipping routes through the Red Sea.

This has led to higher transport costs and a subsequent increase in the cost of goods, spreading energy-driven inflation across manufacturing and retail.