Eurozone inflation edged higher in September, driven by rising energy costs, official data showed on Wednesday, strengthening expectations that the European Central Bank (ECB) will not cut interest rates again this year.
Inflation increased to 2.2 per cent last month, up from two per cent in August, according to the EU’s statistics agency, surpassing the ECB’s two per cent target.
The figure matched forecasts by analysts surveyed by Bloomberg, although FactSet economists had expected a slightly higher rise to 2.3 per cent.
Core inflation — which excludes volatile energy, food, alcohol, and tobacco prices — remained unchanged at 2.3 per cent, in line with economists’ predictions from both Bloomberg and FactSet.
It held steady despite service price growth accelerating to 3.2 per cent in September from 3.1 per cent the previous month.
Energy prices declined by 0.4 per cent in September, a significantly smaller drop than the 2.0 per cent recorded in August, Eurostat reported.
Meanwhile, price increases for food, alcohol, and tobacco slowed to 3.0 per cent, down from 3.2 per cent in August.
Riccardo Marcelli Fabiani, senior economist at Oxford Economics, said the September figure would reinforce the ECB’s current interest rate stance.
“Only a significant surprise in inflation could prompt a rate cut this year,” he noted.
Inflation in Germany and France — the eurozone’s two largest economies — also picked up in September, reaching 2.4 per cent and 1.1 per cent, respectively.