The flash estimate of the eurozone consumer price index for September, released by the European Union's statistics agency, rose 3.8% year-on-year, accelerating from 3.2% the previous month and exceeding the market forecast of 3.6%. The acceleration in inflation was driven mainly by higher prices for fuel and natural gas, and to a lesser extent by rising food prices. With energy costs surging, inflation is expected to climb further in the coming months, keeping pressure on the European Central Bank for additional rate hikes. Meanwhile, core inflation, which excludes volatile food and fuel prices, widened from 2.4% to 2.5% on higher service prices, but the modest pace of the increase suggests that high energy costs have not yet generated second-round effects.
Eurozone inflation accelerated to 3.8%, beating forecasts and keeping pressure on the ECB for additional rate hikes, which strengthens the euro.
