Eurozone inflation jumps to 3.8% in September, above forecasts
Core inflation held at 2.5% as expected, but the headline rate rose nearly a full point from August
Published
Consumer prices across the eurozone rose 3.8% in September from a year earlier, the EU's statistics agency said, above the 3.7% economists had expected and up sharply from 3.2% in August. Core inflation, which strips out food and energy, held at 2.5%, in line with forecasts.
Prices rose 0.6% from August, faster than the 0.5% increase economists had penciled in.
The European Central Bank's deposit rate stands at 2.50%, effective since September 16 after a quarter-point increase decided on September 10, according to an ECB rate tracker published by Oracle Markets. The bank's next rate decision falls on October 29, with the announcement due at 14:15 CET followed by a press conference, according to a meeting calendar compiled by Admiral Markets. The ECB targets inflation close to but below 2% over the medium term, according to a preview published by Finance Calendar.
The jump confirms that Spain's stronger September print, reported two weeks ago, was not an isolated case. With the bloc-wide headline rate climbing close to a full point and core inflation stuck at 2.5%, the case for a steady decline in prices that had underpinned expectations of a policy pause looks weaker than it did then. Governing Council members have flagged competing concerns in recent weeks, with discomfort voiced over inflation running above 3% in some member states, alongside a view that higher long-term bond yields are already tightening financial conditions on their own, and a suggestion that any further move could wait until January. That leaves policymakers with a harder number to square against their current wait-and-see stance.