Eurozone Inflation Hits One-Year High of 3.8%, Bolstering ECB Rate Hike Expectations
| Pair | Now | Since publish |
|---|---|---|
| EURUSD | — | — |
- Eurozone inflation hit 3.8% in September, beating 3.7% forecast.
- Energy prices surged, Euro 95 petrol hit all-time high.
- Core inflation rose to 2.5%, well above ECB’s 2% target.
Eurozone preliminary annual inflation accelerated to 3.8% in September, surpassing market expectations of 3.6% and marking its highest level in three years. This increase from 3.2% in August was primarily driven by a significant 18.8% year-on-year surge in energy prices, with food, alcohol, and tobacco prices also rising by 1.4%. While core inflation, excluding volatile components, rose marginally to 2.5% and met forecasts, the headline figure remains well above the European Central Bank’s 2% target. This persistent inflationary pressure, also observed in Germany and other major EU economies, is expected to bolster expectations for further monetary policy tightening by the ECB.
Eurozone inflation accelerated more than expected to 3.8% in September, marking the highest level since September 2023. This figure surpassed the forecast of 3.7% and rose from 3.2% in August. Energy prices remained the primary driver, with Euro 95 petrol prices reaching an all-time high. Core inflation, excluding energy, food, alcohol, and tobacco, also saw a marginal increase to 2.5% from 2.4% in the prior month. ECB President Christine Lagarde previously expressed surprise at the limited pass-through of higher energy costs to other inflation categories.