Inflation Jumps Across Euro Zone, Raising Pressure on ECB
- On Wednesday, September inflation data showed France's rate rose to 3.4 per cent, Spain to 5 per cent, and Italy to 4.1 per cent, all exceeding the European Central Bank's 2 per cent target. Energy-price shocks from the Iran war drove the surge.
- To prevent rapid price growth, the European Central Bank has lifted rates twice this year. Under its "Adverse." scenario, the bank sees inflation reaching 4 per cent in the fourth quarter, aligning with current energy costs.
- With winter approaching and Middle East tensions unresolved, a correction in energy prices is unlikely "any time soon," said Rory Fennessy, senior European economist at Oxford Economics. Markets expect four more interest rate hikes over the next year.
- European Central Bank chief Christine Lagarde said on Monday that a moderate policy response remains appropriate, as the inflation surge has yet to generate dangerous second-round effects across Europe.
- Germany's inflation rose sharply in five key states, suggesting the national rate could increase. Economists polled by Reuters expect inflation in the bloc to reach 3.6 per cent in September, up from 3.2 per cent in August.
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68 Articles
Inflation Grips EU’s Top Economies as Oil Prices Pummel Region
Inflation in Europe’s top economies jumped to the highest level in years following the latest upswing in energy markets, focusing attention on what the European Central Bank will do next to tame prices.
Faster-than-expected inflation in the eurozone's biggest economies makes it more likely that the European Central Bank will raise interest rates again this year to keep price growth under target, further pushing up borrowing costs at a time when governments are already facing the highest bond yields since the 2012 debt crisis.
DECRYPTAGE - Inflation (to 3% in September) is expected to accelerate, driven by rising energy prices and sharp increases in fresh products, and is expected to spread to consumer products sold in supers, supers and hypers.
INFLATION in key eurozone countries is rising faster than expected, driven by rising energy prices. This increases the likelihood that the ECB will raise interest rates again, weighing on the economy.
Inflation accelerated in the eurozone ' s major economies during September, driven by rising energy prices, boosting interest-raising expectations, amid estimates of inflation in the region reaching 3.6%.
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