Euro zone inflation surges to 10-year high

Shoppers in the euro zone face a surge in prices.

Inflation in the region hit a ten-year high in August.

Price rises jumped to 3% this month, well above analyst forecasts and way clear of the European Central Bank's 2% target.

Food prices and energy costs were among the big drivers.

And the numbers will make uncomfortable reading for ECB economists.

The central bank has repeatedly raised its inflation forecasts, only for the actual numbers to come in even higher.

Even so, policymakers argue that one-off factors are driving the rise, and inflation will soon cool off.

A muted market reaction to Tuesday's (August 31) numbers suggests that investors buy that, for now at least.

But with price rises in Germany projected to hit 5% in the coming months, long-dormant memories of hyperinflation are being reawakened.

When ECB policymakers next meet in early September, they will face tough questions, and mounting pressure to act.

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