The increase in energy prices again raised inflation in the Eurozone

The European Statistics Office announced a renewed increase in inflation in the Eurozone due to rising energy prices.

According to the report of Ambassador Arjan and quoted by Wirtschaftswohe newspaper, inflation in the Eurozone is increasing significantly higher than the target of the European Central Bank and has reached 3.8%. In particular, energy prices are rising, which has implications for interest rates and savers.

Consumer prices rose by 3.8 percent in September compared to the same period last year, according to the second estimate released by the Eurostat statistics office in Luxembourg on Friday. This is the highest inflation rate since September 2023. As analysts expected, the initial estimate was confirmed.

In August, the inflation rate was 3.2 percent and in July it was 2.9 percent. Thus, inflation is increasingly rising above the European Central Bank's (ECB) medium-term target of two percent, where the financial institution sees price stability as guaranteed.

Most recently, the central bank raised key interest rates in September due to rising inflation. The deposit rate, which is important for banks and savers, increased by 0.25 percent to 2.50 percent.

Energy was the main cause of price increase. Energy price increases accelerated again in September, with Eurostat reporting an 18.9 percent increase over last year. This is due to the consequences of the US-imposed war against Iran, which has disrupted the transportation of oil from the Persian Gulf oil fields. The continuous reopening of the Strait of Hormuz is still far from reach.

Meanwhile, the core inflation rate, which excludes volatile components such as energy and food, rose only slightly to 2.5 percent, as expected, from 2.4 percent in the previous month.

In Germany, the inflation rate increased significantly in September and reached 3.3% according to the Harmonized Index of Consumer Prices (HICP). Inflation was particularly high in Spain, where the rate reached 5.0 percent. In Italy, it increased to 4.2% and in France to 3.4%.