Eurozone Inflation Hits 3-Year High Amid Energy Shock

The Eurozone's inflation rate surged to 3.3% in August, driven primarily by energy costs linked to the ongoing Iran conflict and disruptions around the Strait of Hormuz.

This marks a significant increase from July's 2.9%, reaching its highest level since September 2024, according to a flash estimate from Eurostat.

The acceleration in energy costs is particularly concerning for Europe, as it is a net importer of energy and has been exposed to the disruption in global oil and gas markets.

Core inflation, which excludes energy, food, alcohol, and tobacco, eased to 2.4% from 2.5%, providing some room for the European Central Bank (ECB) to argue that the latest inflation spike is primarily an energy shock rather than a broad-based acceleration in domestic prices.