Eurozone inflation climbed to 2.2% in September, its highest level in five months, Eurostat reported.
Core inflation held steady at 2.3% for the fifth consecutive month, signaling persistent underlying pressures.
Services led price growth with a 3.2% annual increase, while food, alcohol, and tobacco rose 3.0%.
Energy prices fell 0.4%, slowing from August’s 2.0% drop, while non-energy industrial goods remained flat at 0.8%.
Estonia recorded the highest inflation at 5.2%, followed by Croatia and Slovakia at 4.6%.
Cyprus saw no change, France rose 1.1%, and monthly trends showed Italy up 1.3% and Portugal 1.0%.
ECB Maintains Rates Amid Moderate Inflation
The ECB left interest rates unchanged at 2.00% during its September meeting.
President Christine Lagarde said the bank remains “in a good place” and sees no urgent reason to shift policy.
Oxford Economics senior economist Riccardo Marcelli Fabiani said the slight uptick reinforces the ECB’s decision to avoid rate cuts.
ECB projections show inflation averaging 2.1% in 2025, falling to 1.7% in 2026, and rising to 1.9% in 2027.
Markets expect the ECB to maintain its stance at the next meeting on 30 October.
Markets React to US Shutdown Concerns
The euro strengthened to 1.1750 against the US dollar after a broader greenback selloff tied to a government shutdown.
The shutdown threatens payroll reports and could furlough hundreds of thousands, weighing on investor sentiment.
European equities remained mostly muted, with EURO STOXX 50, DAX, and CAC 40 up 0.3%, FTSE MIB down 0.1%, and EURO STOXX 600 up 0.5%.
Sartorius led gains with a 9% surge, Sanofi rose 4%, and Novo Nordisk climbed 3.3%.
Defence stocks fell, with Rheinmetall down 2.3%, Leonardo off 2%, and Thales slipping 1.4%.
