Eurozone Inflation Hits Three-Year High Amid Energy Price Spike

Eurozone inflation surged to a three-year high of 3.8% in September, driven by energy price increases fueled by the ongoing conflict in the Middle East. The figure is up sharply from 3.2% in August and remains above the European Central Bank's 2% target.

The war against Iran has disrupted fuel supplies from the region, including through the key energy trade route of the Strait of Hormuz. Energy price increases surged to 18.8% in September, up from 14.3% a month earlier.

While core inflation, which strips out volatile energy and food prices, rose to 2.5%, analysts warn that higher energy costs could begin to feed more broadly into prices. As a result, the European Central Bank may raise interest rates again in October, according to economist Alex Nairn.