The combination of hotter than average weather, drought and rising energy costs that are pushing up inflation in the eurozone could be described as "heatinflation." The German government unveiled the details of a new gas levy on consumers from October 1, this increases the risks of German inflation rising to double digits. This could hit the 48% of German households that are gas-heated particularly hard. We forecast eurozone inflation above 10% in October, with upside risks. The drought in Germany could put further pressure on food prices, which are already rising rapidly. - HSBC
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