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Euro area inflation rose to 4.0% in October, Eurostat flash estimate shows
Eurostat’s flash estimate put euro area annual inflation at 4.0% in October, up from 3.8%, with energy at 20.8%. Reuters said markets still price further ECB rate increases.
Euro area annual inflation is expected to be 4.0% in October, up from 3.8% in September, according to a Eurostat flash estimate released Wednesday1.
Energy is expected to have the highest annual rate at 20.8%, compared with 18.9% in September, Eurostat said, followed by services at 3.3% (from 3.2%) and non-energy industrial goods at 1.2% (from 1.1%)1. Food, alcohol and tobacco is expected at 1.6%, from 1.3%1.
Reuters, citing the same figures, said the 4.0% print matched a poll of economists and that a core measure excluding food and energy held at 2.5%. Reuters reported energy inflation as 20%.
The European Central Bank targets 2% inflation, Reuters noted. The same report said energy costs have risen this year amid the U.S. war with Iran, that the ECB left rates unchanged last week, and that the heads of the German and Italian central banks have indicated a December increase is likely.
Financial markets were pricing two to three increases to the ECB's 2.5% deposit rate over the coming year, Reuters reported. Sweden's central bank raised rates on Wednesday, and the Bank of England, meeting Thursday, was expected to lift its key rate to 4.00%, according to the same report.
Reuters said the ECB expects inflation to stay above 4% for much of the first half of 2027 before easing. Eurostat said the next full HICP release for October is scheduled for 18 November 20261.
Sources
EurostatOfficial source