Eurozone inflation climbed to 2.2% in September, its highest level in five months, Eurostat reported.
Core inflation stayed firm at 2.3%, maintaining pressure on the European Central Bank’s cautious stance.
On a monthly basis, prices rose 0.1%, repeating August’s increase and showing persistent upward trends.
Drivers and Regional Differences in Prices
Services posted the strongest rise, up 3.2%, while food, alcohol, and tobacco climbed 3.0%.
Non-energy industrial goods held steady at 0.8%, while energy prices fell 0.4%, slowing from August’s 2.0% drop.
Estonia recorded the highest annual rate at 5.2%, while Cyprus saw no inflation and France posted 1.1%.
Italy and Portugal led in monthly rises, with prices climbing 1.3% and 1.0% respectively, highlighting local acceleration.
ECB and Market Reactions
The ECB kept rates steady at its September meeting, maintaining the deposit facility at 2.00%.
President Christine Lagarde reaffirmed that the bank feels “in a good place” to hold rates for now.
Analysts said easing wage growth, low energy prices, and weak demand support the bank’s current stance.
Markets expect the ECB to keep rates unchanged at its 30 October meeting, despite September’s inflation uptick.
Meanwhile, the euro rose to 1.1750 against the US dollar, boosted by concerns over a US shutdown.
European equities mostly inched higher, with the EURO STOXX 600 gaining 0.5% as Sartorius surged 9%.
Defence stocks slipped, with Rheinmetall dropping 2.3%, Leonardo falling 2%, and Thales losing 1.4%.
