Euro zone inflation is back above 3%. Higher interest rates are likely to follow

Live updates

1. 1h ago

   J.P. Morgan and BNP Paribas Forecast December ECB Rate Hike

   J.P. Morgan and BNP Paribas now expect the European Central Bank to implement a 25-basis-point rate hike in December. This shift follows previous expectations that the tightening cycle would end sooner. The firms cite elevated energy prices and persistent inflation risks as the primary drivers for the revised outlook. This suggests borrowing costs in the euro zone will stay high longer than anticipated, supported by resilient regional economic growth and ongoing concerns regarding energy supplies.

   Why it matters

   Eurozone inflation hit 3.3% in August, driven by energy costs. This surge puts pressure on the ECB to raise rates to stabilize prices. The Dax index currently stands at 26,100 points as investors react to the prospect of further increases.

   What is confirmed

   • J.P. Morgan and BNP Paribas forecast a 25-basis-point ECB rate hike in December.
   • The Dax is at 26,100 points.

   Still unconfirmed

   • Strategists believe the gloomy mood among Dax investors will not brighten due to further rate increases.
   • Resilient regional economic growth and energy supply concerns are driving the revised ECB outlook.

   What to watch next

   • European Central Bank interest rate decision next week
   • U.S. Non-Farm Payrolls (NFP) report at 12:30 GMT
   Sources used for this update (4)

   1. www.fxempire.com — Silver (XAG) Forecast: Silver Rallies as Waller Comments Pressure Rate-Hike Odds
   2. www.fxempire.com — Gold (XAU/USD) & Silver Price Forecast: NFP Takes Center Stage as Fed Hike Bets Ease
   3. www.marketscreener.com — Rate jitters could deepen Dax investors' autumn blues
   4. english.aawsat.com — J.P. Morgan, BNP Paribas Forecast December ECB Rate Hike
   confidence 90%
2. 1d ago

   Eurozone inflation exceeds 3% as ECB weighs interest rate hikes

   Eurozone inflation reached 3.3% in August due to rising energy costs, pushing the rate above 3% and toward a three-year high. This surge increases the likelihood of European Central Bank interest rate hikes. Policymaker Nagel indicated a potential increase next week, though he remains cautious. Other officials, such as Simkus, believe a single September hike will not suffice to curb inflation. The price spike has already triggered a selloff in the bond market.

   Why it matters

   Persistent inflation forces the ECB to balance price stability against economic growth. A conflict of attrition in Iran is cited as a potential factor that could keep inflation elevated over the long term.

   What is confirmed

   • Eurozone inflation rose to 3.3% in August.
   • Surging energy prices drove the inflation increase.
   • The inflation rate is near a three-year high.

   Still unconfirmed

   • A conflict of attrition in Iran could sustain high inflation levels.

   What to watch next

   • ECB interest rate decision next week
   • Further energy price fluctuations
   • Upcoming inflation data reports
   Sources used for this update (4)

   1. www.sandiegouniontribune.com — San Diego Union-Tribune
   2. consent.yahoo.com — Tesla, Inc. (TSLA) Stock Forum & Discussion - Yahoo Finance
   3. www.fxempire.com — US Dollar Price Forecast: Weak ADP Hits DXY as NFP Becomes the Next Test; Key Levels for EUR/USD and GBP/USD Today
   4. pro.thestreet.com — Welcome to TheStreet Pro
   confidence 80%
3. 2d ago

   Eurozone inflation hits 3.3% in August sparking ECB rate hike bets

   Eurozone inflation rose to 3.3% in August, driven by surging energy prices. This increase brings inflation back above 3% and near a three-year high, strengthening expectations that the European Central Bank will raise interest rates. ECB policymaker Nagel has signaled a hike for next week, though he remains cautious about further moves. Some officials, including Simkus, argue a September hike alone will be insufficient, while others warn that a conflict of attrition in Iran could sustain high inflation levels. The price jump has also contributed to a selloff in bonds.

   Why it matters

   The ECB is balancing inflation control against economic stability. Energy price volatility is a primary driver of the current spike, making the central bank's upcoming policy decisions critical for market stability.

   What is confirmed

   • Eurozone inflation rose above 3% in August.
   • August inflation reached 3.3% due to surging energy prices.
   • The current inflation level is near a three-year high.
   • ECB policymaker Rehn warned that a conflict of attrition in Iran could keep inflation high.

   Still unconfirmed

   • ECB policymaker Makhlouf said the upcoming policy decision will not surprise anyone.

   What to watch next

   • The ECB policy decision scheduled for next week
   • Further data on energy price trends
   • Updates on the conflict in Iran
   Sources used for this update (16)

   1. CNBC — Euro zone inflation is back above 3%. Higher interest rates are likely to follow
   2. Reuters — Euro zone inflation rises above 3%, cementing ECB rate hike bets
   3. Financial Times — ‘Conflict of attrition’ in Iran could keep inflation high, ECB policymaker warns
   4. wsj.com — Eurozone Inflation Picks Up, Adding Fuel to Bond Selloff
   5. Euronews.com — Eurozone inflation jumps to 3.3% in August as energy prices surge
   6. Reuters — Iran war could keep inflation high, ECB policymaker Rehn warns, FT reports
   7. WSJ — Eurozone Inflation Climbs to Near Three-Year High Ahead of ECB Meeting
   8. Bloomberg.com — ECB’s September Hike Won’t Be Enough, Simkus Tells Econostream
   9. Reuters — ECB says energy-led inflation spike justifies June rate hike
   10. FocusEconomics — Inflation picks up in August from July
   11. investingLive — ECB policymaker Makhlouf says upcoming policy decision will not surprise anybody
   12. Financial Times — ECB must be prepared to lift interest rates further, says top policymaker
   confidence 90%