Eurozone inflation climbed to 2.2% in September, driven by rising services and energy costs.
Core inflation remained steady at 2.3%, signaling persistent underlying price pressures.
Eurostat reported prices increased 0.1% month-on-month, matching August’s pace and economist predictions.
Services posted the highest growth at 3.2% annually, up slightly from 3.1% in August.
Food, alcohol, and tobacco prices rose 3.0%, easing from 3.2%, while non-energy goods stayed at 0.8%.
Energy costs fell 0.4%, a slower decline than August’s 2.0%.
Estonia reported the highest national inflation at 5.2%, followed by Croatia and Slovakia at 4.6%.
Cyprus showed no annual change, and France rose modestly by 1.1%.
Italy and Portugal saw notable monthly increases of 1.3% and 1.0%, suggesting localized acceleration.
ECB Maintains Steady Policy
The ECB kept interest rates unchanged in September, leaving the deposit facility at 2.00%.
Projections expect inflation to average 2.1% in 2025, fall to 1.7% in 2026, and rise to 1.9% in 2027.
Core inflation is forecast to gradually decline over the same period.
ECB President Christine Lagarde said the bank can hold rates steady without urgent action.
Economist Riccardo Marcelli Fabiani highlighted cooling wage growth, low energy prices, and a strong euro as factors easing inflation.
He noted that the September uptick reinforces the ECB’s view that cutting rates would be premature.
Markets expect the ECB to maintain rates at its next meeting on 30 October.
Euro Strengthens Amid US Shutdown Concerns
The euro climbed to 1.1750 against the dollar as a US federal government shutdown pressured the greenback.
The shutdown threatens furloughs and delays key reports, including Friday’s nonfarm payrolls, unsettling investors.
Wall Street futures fell while European equities showed mixed results: EURO STOXX 50, DAX, and CAC 40 rose 0.3%, FTSE MIB fell 0.1%.
The broader EURO STOXX 600 gained 0.5%, led by Sartorius up 9%, Sanofi 4%, and Novo Nordisk 3.3%.
Defence stocks dropped, with Rheinmetall down 2.3%, Leonardo 2%, and Thales 1.4%.
