Eurozone inflation climbed to 2.2% in September, the highest level since April, according to Eurostat.
Services prices grew 3.2%, while food, alcohol and tobacco increased 3.0%, slightly easing from August.
Core inflation held firm at 2.3% for the fifth month, signaling persistent underlying price pressures.
Energy prices continued to contract, dropping 0.4% compared with a 2.0% fall in August.
Estonia posted the highest inflation at 5.2%, with Croatia and Slovakia following at 4.6% each.
Cyprus recorded no annual change, while France reported only a 1.1% rise.
ECB Maintains Rate Strategy
The European Central Bank left interest rates unchanged at its September meeting, keeping the deposit facility at 2.00%.
Projections showed inflation averaging 2.1% in 2025, then easing to 1.7% in 2026.
By 2027, inflation is expected to nudge back to 1.9%, with core inflation declining gradually.
ECB President Christine Lagarde said policymakers remain “in a good place” to keep rates steady.
Economist Riccardo Marcelli Fabiani noted inflation should ease further, driven by cooling wages and lower energy costs.
He argued September’s uptick strengthens the ECB’s conviction against early rate cuts.
Market Reactions and Global Links
Markets expect the ECB to keep rates unchanged at its October 30 meeting.
The euro strengthened to 1.1750 against the US dollar, lifted by weakness in the greenback.
The US federal shutdown shook investor confidence, pushing Wall Street futures lower.
European equity indices posted mixed results, with the EURO STOXX 600 gaining 0.5%.
Pharma stocks surged, led by Sartorius with 9%, followed by Sanofi and Novo Nordisk.
Defence shares lagged, as Rheinmetall, Leonardo, and Thales all recorded losses.
