Eurozone inflation rose to 2.2% in September, reaching its highest level in five months.
Core inflation held steady at 2.3%, showing underlying pressures remain firm despite rising headline figures.
Eurostat reported that prices increased 0.1% month-on-month, matching August’s growth rate.
Services and Energy Drive Price Growth
Services prices increased 3.2% annually, slightly higher than August’s 3.1% rise.
Food, alcohol and tobacco prices grew 3.0%, easing from 3.2%, while non-energy industrial goods held steady at 0.8%.
Energy costs declined 0.4%, slowing from a 2.0% fall in August.
Estonia recorded the highest inflation at 5.2%, followed by Croatia and Slovakia at 4.6% each.
Cyprus posted no change, while France registered only a 1.1% rise.
Italy and Portugal showed the strongest monthly gains, with increases of 1.3% and 1.0% respectively.
ECB Maintains Cautious Approach
The European Central Bank left interest rates unchanged in September, keeping the deposit facility at 2.00%.
ECB projections show inflation averaging 2.1% in 2025, falling to 1.7% in 2026, then edging back to 1.9% in 2027.
President Christine Lagarde insisted the ECB remains “in a good place” to hold rates steady.
Oxford Economics senior economist Riccardo Marcelli Fabiani said inflation will descend due to cooling wages, low energy costs, and contained demand.
He added that the September uptick reinforces the ECB’s stance against early rate cuts.
Markets expect the Governing Council to hold rates steady at its October 30 meeting.
Euro Rises Amid US Shutdown Concerns
The euro climbed to 1.1750 against the US dollar after a broad selloff in the greenback.
The US government shutdown shook investor sentiment and threatened to delay major economic data releases.
Wall Street futures dropped, while European equities showed mixed but modest movements.
The EURO STOXX 50, Germany’s DAX, and France’s CAC 40 all gained 0.3%.
Italy’s FTSE MIB edged down 0.1%, while the broader EURO STOXX 600 rose 0.5%.
Sartorius led individual stock gains with a 9% jump, followed by Sanofi and Novo Nordisk.
Defence stocks lagged, with Rheinmetall dropping 2.3%, Leonardo falling 2%, and Thales slipping 1.4%.
