Eurozone Inflation Surges to 3.3%, Cementing ECB Rate Hike

The European Central Bank (ECB) is likely to raise interest rates for the second time this year after Eurozone inflation rebounded to 3.3% in August, driven by soaring energy costs.

The August figures show a significant increase from July's 2.9%, with energy prices being the main contributor to the surge. The ECB had predicted an uptick in inflation due to ongoing geopolitical tensions and disruptions in global supply chains.

Core inflation, which excludes volatile food and fuel prices, eased slightly to 2.4% in August. However, this moderation is seen as a positive sign for policymakers, indicating that energy price shocks have not yet led to wage-price spirals.

The ECB's decision to raise interest rates is now almost certain, with a widely anticipated hike expected on September 10. This will be the institution's second tightening maneuver this year, following a rate hike in June.