Euro Zone Inflation Jumps to 3.8% as Energy Costs Keep ECB Under Rate Pressure
Updated
Updated · Yahoo Finance · Oct 2
Euro Zone Inflation Jumps to 3.8% as Energy Costs Keep ECB Under Rate Pressure
3 articles · Updated · Yahoo Finance · Oct 2
Summary
Euro zone consumer prices rose 3.8% in September from 3.2% in August, beating a 3.6% Reuters poll forecast and marking a sharper-than-expected acceleration.
Fuel and natural gas drove the jump, with food adding pressure, while core inflation edged up to 2.5% from 2.4% as services prices firmed.
The mix leaves the ECB under pressure after two summer rate hikes, but the modest core increase supports a measured path; markets see this month's move as unlikely and the next hike not fully priced until January.
Governments are also being squeezed as higher energy bills hit households and businesses, with France already seeing street protests and subsidies so far totaling about 0.1% of euro zone GDP.
Policy hawks warn prolonged energy costs could still spill into broader prices, especially if the recent natural-gas surge lifts heating, electricity and business expenses in coming months.