Euro Area: Inflation rises to new series high in September
Harmonized inflation jumped to 10.0% in September from August’s 9.1% reading, moving further above the European Central Bank’s target rate of 2.0% and marking the highest print in the series’ history. September’s result was due to faster increases in the prices for energy, food, alcohol and tobacco, non-energy industrial goods and services.
On a monthly basis, harmonized consumer prices rose 1.3% in September, above August’s 0.6%. The annual rate of core inflation, which excludes volatile energy and unprocessed foods prices, rose to 6.1% in September from August’s 5.5%—also marking the highest print since records began.
Commenting on the implications for the ECB’s monetary policy stance, Bert Colijn, senior economist at ING, noted:
“The differences in inflation between countries are becoming more significant […]. The divergence between countries would normally complicate the picture for the ECB, but with current high inflation rates the trajectory is clear: the ECB is set to hike drastically at the coming meetings to get to neutral and possibly beyond quickly.”