Euro zone inflation hit a 13-year high last month and looks likely to jump higher still, further clouding the European Central Bank’s benign view of the biggest price spike since before the global financial crisis.
Consumer price inflation in the 19 countries sharing the euro accelerated to 3.4% year on year in September from 3% a month earlier, the highest reading since September 2008 and just ahead of analyst expectations for 3.3%, data from Eurostat, the EU’s statics agency showed on this morning.
Prices rose predominantly on a surge in energy costs.
Durable goods prices rose 2.3% from August.
With natural gas prices surging and bottlenecks impacting everything, inflation could hit 4% by the end of the year, twice the ECB’s target, before what the bank anticipates will be a relatively quick decline in early 2022.
ECB President Christine Lagarde struck a more cautious tone this week, pointing to increased inflation risks, even if she called for patience and warned against overreacting.
Market economists are meanwhile shifting their views, arguing that central banks may be underestimating the inflation risk.
