Eurozone inflation climbed to 2.2% in September, rising from 2.0% in August, Eurostat reported.
Monthly prices increased 0.1%, repeating August’s pace, while core inflation held steady at 2.3%.
Services led price gains with a 3.2% annual rise, and food, alcohol, and tobacco rose 3.0%.
Energy prices fell 0.4%, easing from August’s 2.0% decline, while non-energy industrial goods remained at 0.8%.
Estonia recorded the highest inflation at 5.2%, followed by Croatia and Slovakia at 4.6% each.
Cyprus saw no change, France increased 1.1%, and Italy and Portugal rose 1.3% and 1.0% respectively.
ECB Maintains Rates Amid Rising Prices
The ECB kept its deposit facility rate at 2.00% in September, signaling a cautious stance.
President Christine Lagarde emphasized that the bank sees no immediate need to tighten or ease policy.
Economists expect inflation to gradually decline, supported by lower energy prices, moderate wage growth, and subdued demand.
Oxford Economics’ Riccardo Marcelli Fabiani said the September uptick reinforces the ECB’s decision to hold rates steady.
Markets widely predict the ECB will keep interest rates unchanged at its next October 30 meeting.
Markets React to US Shutdown Risks
The euro rose to 1.1750 against the dollar after the US government shutdown pressured investor sentiment.
Futures on Wall Street fell as the shutdown threatens furloughs and delays key economic reports, including nonfarm payrolls.
European equities showed mixed moves: the EURO STOXX 50, DAX, and CAC 40 rose 0.3%, Italy’s FTSE MIB fell 0.1%, and the EURO STOXX 600 gained 0.5%.
Sartorius surged 9%, Sanofi climbed 4%, and Novo Nordisk rose 3.3%, while defence stocks fell.
Rheinmetall dropped 2.3%, Leonardo fell 2%, and Thales lost 1.4% amid cautious trading.
