Eurozone inflation rose to 2.2% in September, reaching its highest level since April.
Core inflation stayed steady at 2.3%, showing underlying price pressures remain firm.
Services drove inflation with a 3.2% annual increase, while energy prices fell more slowly.
Food, alcohol, and tobacco prices increased 3.0%, slightly down from August, and non-energy industrial goods stayed at 0.8%.
Estonia recorded the highest annual inflation at 5.2%, followed by Croatia and Slovakia at 4.6%.
Cyprus reported no change, France rose 1.1%, and Italy and Portugal saw notable monthly gains of 1.3% and 1.0%.
ECB Maintains Rates Amid Steady Inflation
The ECB kept interest rates unchanged in September, leaving the deposit facility at 2.00%.
Projections show inflation falling to 1.7% in 2026 before climbing slightly to 1.9% in 2027.
President Christine Lagarde said the ECB sees no need to tighten or ease policy further.
Economist Riccardo Marcelli Fabiani said cooling wages, low energy prices, a strong euro, and weak demand will reduce inflation.
He added the recent uptick reinforces the ECB’s view that it is too early to cut rates.
Markets expect the ECB to maintain rates at its next meeting on October 30.
Euro Strengthens as US Shutdown Sparks Concern
The euro rose to 1.1750 against the US dollar amid a greenback selloff following the US government shutdown.
The shutdown could furlough hundreds of thousands of workers and delay key economic data, including Friday’s payroll report.
Wall Street futures declined, while European equities moved modestly: EURO STOXX 50, DAX, and CAC 40 gained 0.3%, FTSE MIB slipped 0.1%.
The broader EURO STOXX 600 rose 0.5%, with Sartorius up 9%, Sanofi 4%, and Novo Nordisk 3.3%.
Defence stocks lagged: Rheinmetall dropped 2.3%, Leonardo fell 2%, and Thales lost 1.4%.
