Eurozone Inflation Rises to 3.3% in August 2026 Amid Energy Price Surge

Eurozone inflation climbed to 3.3% in August 2026, up from 2.9% in July, according to a flash estimate from Eurostat, the statistical office of the European Union.

The increase was largely driven by energy, as global oil and gas prices surged amid the war in Iran and disruption to shipping through the Strait of Hormuz. Energy prices rose by 14.3% in the year to August, accelerating from 10.3% in July.

Leo Barincou, senior economist at Oxford Economics, said: "This was driven by a rebound in fuel prices following the renewed closure of the Strait of Hormuz, while underlying price pressures remained contained as services inflation came down. Inflation should remain well above target into next year, as higher gas and food prices put additional upward pressure on the index."

Food, alcohol and tobacco prices rose by 1.2%, unchanged from July.

Services inflation — a more persistent measure closely watched by the ECB — eased from 3.3% to 3.0%.

On a monthly basis, overall prices in the eurozone rose by 0.4% in August, with energy prices alone increasing by 2.9%.

At the same time, core inflation, which excludes energy, food, alcohol and tobacco, edged down from 2.5% to 2.4%. This suggests that the rise in energy costs has not yet spread extensively to services and other prices.

Among eurozone members included in the August flash estimate, Lithuania recorded the highest inflation rate, at 5.8%, while Estonia had the lowest, at 1.3%.

Among the largest economies, inflation in France and Germany, at 2.7% and 2.9% respectively, remained below the eurozone headline rate. France, however, recorded a noticeable increase from 2.4% to 2.7%.

Spain stood out with inflation of 4.5%, well above the eurozone average, while Italy's rate reached 3.2%.

Eurozone inflation is considerably above the European Central Bank's 2% target. Markets expect the ECB to raise interest rates by 0.25 percentage points at its meeting on 10 September as policymakers seek to contain price pressures.

"With inflation still accelerating, the ECB is all but certain to hike at next week’s meeting, in line with our expectations," Barincou said.

"However, unlike markets, we think it is too early to pencil in a third hike, especially given that underlying price pressures remain contained for now," he added.