Eurozone inflation jumps to 3-year high
What's the story
Eurozone's inflation rate has hit a three-year high of 3.8% in September, sharply rising from August's 3.2%. The increase was mainly driven by skyrocketing energy costs, which have pushed consumer prices higher than the market forecast of 3.6%. This is the seventh consecutive month that inflation has remained above the European Central Bank's (ECB) 2% target, putting further pressure on policymakers as they deal with an energy crisis fueled by the ongoing US-Iran conflict.
Inflation surge
Energy inflation highest since January 2023
Energy inflation has surged to 18.8% in September, up from August's 14.3%. This is the highest level since January 2023.
Core inflation, which excludes food and energy prices due to their volatility, also rose slightly to 2.5% from August's figure of 2.4%.
Services inflation climbed as well, reaching a rate of 3.2%, up from last month's figure of 3%.
Economic impact
Complications for ECB
The inflation rate has accelerated in all four of eurozone's largest economies, with Spain recording an annual inflation rate of 5%.
The latest data could complicate ECB's policy outlook, with markets anticipating another 25-basis-point rate hike by the end of this year.
All eyes are now on the ECB's meeting scheduled for October 29.