Eurozone inflation climbed to a three-year high of 4.0% in October, driven primarily by energy and food prices amid the ongoing US-Iran conflict and higher import costs, reinforcing upside risks to the ECB’s 2% target. After holding the deposit rate at 2.5% in late October, the Governing Council signaled a measured tightening step at the December 17 meeting, where fresh staff projections will be available; multiple policymakers, including those from Germany and Italy, have publicly backed a 25 basis point increase to 2.75%. Core inflation has remained stable near 2.5% with limited second-round effects observed so far, supporting a contained move rather than larger adjustments. Trader pricing reflects this consensus, with the December decision viewed as the final likely hike before a pause amid tightening financial conditions and downside growth risks.