Euro zone inflation hits 4% for first time in three years as interest rate hike looms

Shoppers at Roemerberg square in Frankfurt, Germany, on Wednesday, Aug. 12, 2026. Ben Kilb | Bloomberg | Getty ImagesInflation in the euro area jumped to a three-year high of 4% in October, a flash estimate showed on Wednesday. The reading is in line with the expectations of economists polled by Reuters and was up from 3.8% in September. Officials said the increase was largely due to surging energy costs, with energy inflation rising to 20.8% from 18.9% in September. Europe, a net energy importer, is vulnerable to external energy shocks and has seen prices rise steadily since the start of the Iran war.October marked the first time inflation in the euro zone has hit or exceeded the 4% threshold since Sept. 2023's reading of 4.3%. Inflation also varied across the 21 euro zone economies, with Lithuania recording the hottest inflation rate of 6.1% while Malta's was the lowest at 2.3%. All euro zone countries saw inflation hold above the European Central Bank's 2% target. The euro was up 0.6% against the U.S. dollar on Wednesday morning, although the greenback fell against a basket of major currencies as counting continued in the U.S. midterm elections, while the yield on the 10-year Ge...