Inflation in the eurozone accelerated to a three-year high
The European Central Bank is expected to raise interest rates again
Inflation in the eurozone accelerated more than expected and reached a three-year high / Photo: MikeDotta/Shutterstock.com
According to preliminary data, inflation in the eurozone accelerated to 3.8% year-over-year in September from 3.2% in August, Eurostat reported. This is the highest level since September 2023, Bloomberg reports. The median forecast of analysts surveyed by the agency had predicted that inflation in the eurozone would rise to 3.7% last month.
The latest surge in prices is linked to rising oil and gas costs due to the ongoing war with Iran. Inflation exceeded forecasts in all four of the eurozone’s largest economies, reaching 5% in Spain. The ECB has already raised rates twice this year, and it is expected to take at least two more such steps, although expectations for a rate hike in October are waning, according to Bloomberg.
ECB President Christine Lagarde made it clear that there is no need to rush into raising interest rates: rising bond yields will, in and of themselves, curb economic growth and limit the impact of high energy prices on other prices. The central bank aims to prevent the energy shock from becoming entrenched in the economy through demands for higher wages and increases in the prices of finished goods.
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