Euro area inflation accelerated to 3.2% in May 2026, the highest since late 2023, propelled by a sharp 10.9% rise in energy prices amid Middle East supply disruptions. This upside surprise, building on April's jump, has prompted the ECB to signal a 25-basis-point hike in its deposit facility rate to 2.25% at the June 11 meeting, with traders assigning a 98.9% implied probability to that outcome. Policymakers view the move as necessary to anchor expectations and contain second-round effects, consistent with recent hawkish communications and economist polls showing over 90% expecting the increase. A sustained energy price reversal or sharper economic slowdown could still alter the path, though current data and futures pricing indicate limited scope for alternatives.