Eurozone inflation climbed to 2.2% in September, up from 2.0% in August, Eurostat reported.
Monthly prices rose 0.1%, matching August’s increase, while core inflation stayed steady at 2.3%.
Services drove the rise with a 3.2% annual gain, and food, alcohol, and tobacco rose 3.0%.
Energy prices fell 0.4%, a slower decline than August’s 2.0%, and non-energy industrial goods held at 0.8%.
Estonia recorded the highest inflation at 5.2%, while Cyprus saw no change and France rose 1.1%.
Italy and Portugal posted monthly gains of 1.3% and 1.0%, showing localized acceleration.
ECB Maintains Rates Amid Steady Core Inflation
The ECB kept interest rates at 2.00% in September, citing stable core inflation and controlled price pressures.
Projections show eurozone inflation averaging 2.1% in 2025, falling to 1.7% in 2026, and rising to 1.9% in 2027.
Christine Lagarde confirmed the ECB sees no immediate need to tighten or loosen monetary policy.
Economist Riccardo Marcelli Fabiani noted inflation will decline due to weak wage growth, low energy costs, and strong euro.
He added the September uptick reinforces the ECB’s view that cutting rates now remains premature.
Markets expect the ECB to hold rates steady at the 30 October meeting.
Euro Strengthens as US Shutdown Spooks Markets
The euro rose to 1.1750 against the dollar, boosted by the US federal government shutdown and greenback weakness.
The shutdown threatens payroll reporting and could furlough hundreds of thousands of workers, lowering investor confidence.
European equities showed mixed performance: EURO STOXX 50, DAX, and CAC 40 rose 0.3%, while Italy’s FTSE MIB slipped 0.1%.
The broader EURO STOXX 600 advanced 0.5%, led by Sartorius (+9%), Sanofi (+4%), and Novo Nordisk (+3.3%).
Defence stocks lagged, with Rheinmetall down 2.3%, Leonardo off 2%, and Thales down 1.4%.
