Inflation in the euro area hit 3.3% in August after prints of 2.9% in July and 2.8% in June, largely due to higher energy prices linked to the Iran war.
Markets expect the European Central Bank will raise interest rates by a quarter percentage point in response, following its June hike.
However, the ECB will have to weigh the economic cost that higher borrowing costs will apply to heavily indebted households and struggling small- and medium-sized businesses, economists warn.
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