Eurozone annual inflation rose to 2.2% in September, up from 2.0% in August, Eurostat reported.
Services led the increase with a 3.2% yearly rise, while energy prices declined more slowly at 0.4%.
Core inflation stayed steady at 2.3%, signaling that underlying price pressures remain contained.
Estonia recorded the region’s highest inflation at 5.2%, followed by Croatia and Slovakia at 4.6%.
Cyprus saw no annual change, and France posted a modest 1.1% increase.
Italy and Portugal registered monthly price jumps of 1.3% and 1.0%, showing localised acceleration.
ECB Maintains Rates Amid Rising Prices
The ECB kept interest rates unchanged in September, holding the deposit facility at 2.00%.
Projections indicate inflation will average 2.1% in 2025, fall to 1.7% in 2026, and rise to 1.9% in 2027.
President Christine Lagarde affirmed the bank has no immediate need to adjust policy, citing stable core inflation.
Oxford Economics economist Riccardo Marcelli Fabiani said cooling wages, low energy costs, and strong euro support falling inflation.
He added that the September rise reinforces ECB’s view that it’s too early to cut rates.
Markets widely expect the Governing Council to maintain rates at the October 30 meeting.
Euro Rises Amid US Shutdown Concerns
The euro climbed to 1.1750 against the US dollar after the US federal government shutdown spurred a broad greenback selloff.
The shutdown may furlough workers and delay critical economic reports, including Friday’s nonfarm payrolls.
European equity markets mostly moved modestly: EURO STOXX 50, DAX, and CAC 40 gained 0.3%, while FTSE MIB fell 0.1%.
The broader EURO STOXX 600 increased 0.5%, led by Sartorius (+9%), Sanofi (+4%), and Novo Nordisk (+3.3%).
Defence stocks declined: Rheinmetall dropped 2.3%, Leonardo fell 2%, and Thales lost 1.4%.
