Eurozone inflation jumps to 3.8%, a three-year high

Eurostat's flash estimate put September inflation at 3.8%, above forecasts of 3.6 to 3.7% and up from 3.2% in August, the highest reading since 2023. Energy prices drove the rise, up to 18.8% from 14.3%, as the US war against Iran disrupts Middle East fuel supplies, including shipments through the Strait of Hormuz, while core inflation also ticked up to 2.5%. Economists expect the European Central Bank to hold off on raising rates until December rather than react in October, a forecast that will not survive if the energy shock does not fade.

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