Shoppers at Roemerberg square in Frankfurt, Germany, on Wednesday, Aug. 12, 2026. <\/p>\n
Ben Kilb | Bloomberg | Getty Images<\/p>\n
Inflation in the euro area jumped to a three-year high of 4% in October, a flash estimate showed on Wednesday. <\/p>\n
The reading is in line with the expectations of economists polled by Reuters and was up from 3.8% in September<\/a>. <\/p>\n 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.<\/p>\n 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%. <\/p>\n 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. <\/p>\n The euro<\/a> was up 0.6% against the U.S. dollar on Wednesday morning, although the greenback<\/a> fell against a basket of major currencies as counting continued in the U.S. midterm elections, while the yield on the 10-year German bund<\/a> \u2014 broadly seen as a benchmark for euro zone bonds \u2014 was marginally higher.<\/p>\n Policymakers said underlying inflation and wages were broadly stable, despite inflation sitting at a three-year high. <\/p>\n Rate hike looms \u2014 but French turmoil could complicate policy<\/p>\n