Eurozone Inflation Hits Highest Level Since 2023 Amid Elevated Energy Prices

07:08 AM EDT, 10/02/2026 (MT Newswires) -- The annual inflation rate in the euro area accelerated to a three-year high and came in higher than market forecasts in September, as the war in the Middle East drags on and continues to push up energy prices. Eurozone inflation rose to 3.8% in September from 3.2% in August, a touch above the consensus estimate of 3.7%, according to flash estimates released by Eurostat on Friday. Month over month, consumer prices were 0.6% higher, after previously rising 0.4%. The increase in the annual rate was largely attributed to energy inflation, which climbed 18.8% during the month from the prior 14.3%, based on the statistics agency's data. The prices of food, alcohol and tobacco increased by 1.4%, against the previous 1.1% gain, while inflation in services also edged up. In contrast, the price growth in non-energy industrial goods ticked down to 1.1% from 1.2%. "The increase from 3.2% marks the fastest jump since March [2026], the first month of the Middle East war. While it's still mainly driven by energy prices, broader inflationary pressures are mounting as energy prices are expected to stay elevated," research firm ING said, noting that the latest 3.8% figure also marks the highest inflation reading since 2023. "Despite oil prices remaining somewhat below peaks seen in 2022 and this spring, Euro 95 petrol prices have now reached an all-time high. This is weighing significantly on the inflation basket for the moment. But eyes are also on other price categories." Excluding energy, food, alcohol and tobacco, the annual inflation rate stood at 2.5%, in line with market expectations, up from 2.4% in August. On a monthly basis, core consumer prices edged up 0.2%. Among the euro area's top economies, preliminary data showed that harmonized inflation rates in Germany and France accelerated year over year. Italy and Spain also saw an increase in the harmonized index of consumer prices over the period. "[European Central Bank President Christine] Lagarde sounded somewhat dovish earlier this week, pointing to limited second-round effects and already tighter financial conditions - but the ECB still has work to do with inflation significantly higher in September and broader inflationary pressures remaining," ING added. The ECB is scheduled to hold its next monetary policy meeting on Oct. 28 and Oct. 29.