Inflation in the Eurozone rises to 3.8%, the highest in 3 years

WHAT HAPPENED

Eurozone inflation rose to 3.8% in September, up from 3.2% in August and above the expected 3.6%. Energy was the main driver: gas, electricity, and fuels increased by 18.8% in a year.

WHY IT MATTERS

If something cost 100 euros a year ago, it now costs 103.80; energy may cost almost 119. The increase hits households, transportation, bakeries, factories, and greenhouses first, and pressures the European Central Bank to keep credit expensive.

AND FOR YOUR PORTFOLIO

For a long-term portfolio, high rates usually make loans for businesses more expensive and cool down credit-sensitive sectors like construction and consumption. They can also reduce the disposable income of European households to spend.