Euro zone inflation rose to 4.0% in October from 3.8% in September, the highest in three years, according to Eurostat, the European Union (EU) statistics agency, in a Reuters report republished by MarketScreener.

Inflation has been climbing quickly above the European Central Bank’s (ECB) 2% target this year because the US war in Iran pushed energy costs higher, feeding through to retail prices for a bloc that imports the vast majority of its energy. The ECB now expects inflation to hold above 4% for much of the first half of 2027 before falling quickly toward the “low twos,” when high year-earlier figures get knocked from the data. The reading, set to rise further in the coming months, firmed up market bets for another ECB rate hike in December.