FRANKFURT: Inflation across the eurozone has surged to its highest level in three years, reaching 4.0 percent in October as the war in the Middle East sent energy prices sharply higher, official figures showed on November 4.
The rate for the 21 countries that share the euro rose from 3.8 percent in September, according to Eurostat, the European Union’s statistics agency. It remains far above the European Central Bank’s target of two percent, underscoring the growing pressure on households, businesses and policymakers across the continent, reported by Hurriyet Daily News.
The October figure matched economists’ expectations in a Bloomberg survey, but it still strengthened expectations that the ECB will raise interest rates again before the end of the year. The central bank kept its benchmark rate unchanged last week, while leaving the door open to a further increase in December.
“Concerns about the high level of inflation look set to prompt the ECB to raise interest rates again in December, but we suspect that will be the end of the tightening cycle,” said Jack Allen-Reynolds of Capital Economics.
Inflation in the euro area last exceeded four percent in September 2023, when it reached 4.3 percent. The latest rise was driven chiefly by energy, whose prices jumped 20.8 percent in October, up from 18.9 percent the previous month.
Core inflation, which excludes volatile energy and food prices, held steady at 2.5 percent. Food and drink inflation, however, edged up to 1.6 percent from 1.3 percent in September.
Analysts warned that the full effect of costlier energy may not yet be visible. Allen-Reynolds said the indirect impact on food and core inflation had so far been “very small,” but expected it to become more noticeable in the months ahead.
For millions of Europeans, the figures translate into a familiar squeeze: dearer fuel, higher bills and mounting uncertainty. For the ECB, they present a difficult choice between cooling inflation and avoiding further strain on a fragile economy.
