Eurozone inflation jumps to 3.8 per cent in September, driven by an energy shock, raising pressure on the ECB as price growth stays well above its 2 per cent target.
Eurozone inflation surged to a three-year high of 3.8 per cent in September, sharply accelerating from 3.2 per cent in August and exceeding the 3.6 per cent market forecast, as soaring energy costs pushed consumer prices higher.
The latest reading marks the seventh consecutive month in which inflation has remained above the European Central Bank’s 2 per cent target, adding to pressure on policymakers as the bloc grapples with a renewed energy shock linked to the escalating Middle East conflict.
Energy inflation jumped to 18.8 per cent in September, up from 14.3 per cent in August and its highest level since January 2023.
Core inflation, which excludes volatile food and energy prices, rose to 2.5 per cent from 2.4 per cent, while services inflation climbed to 3.2 per cent from 3 per cent.
Inflation accelerated across the eurozone’s four largest economies, with Spain recording a 5 per cent annual inflation rate.
The latest data could complicate the ECB’s policy outlook, with markets pricing in the possibility of another 25-basis-point rate hike by the end of the year. Attention is now turning to the ECB’s October 29 meeting.
More from BusinessFor the ECB, the challenge is becoming increasingly difficult: an energy-driven inflation shock is colliding with broader price pressures, just as policymakers try to keep inflation anchored around 2 per cent.
