Eurozone Inflation Rises to 3.8% in September

Eurozone inflation accelerated to 3.8% in September, up from 3.2% in August and above the European Central Bank’s 2% target, according to Eurostat data. The increase, driven mainly by higher fuel and natural gas prices, has renewed pressure on the ECB to raise interest rates, though a smaller rise in underlying inflation leaves the timing of any move uncertain. Core inflation, which excludes food and energy prices, edged up to 2.5% from 2.4% in August. The data also showed a pickup in services prices. The comparatively modest core increase suggests that energy costs have not yet produced a broad second-round effect across prices, although whether that changes in coming months remains unclear. Fuel and natural gas were the main contributors to the headline rise, with food costs adding less. Energy inflation reached 18.8% in September, compared with 14.3% a month earlier, according to Eurostat figures cited in reports. The overall annual rate was the highest since September 2023, when inflation stood at 4.3%. The figures present competing considerations for the ECB.