The Eurozone's inflation rate has risen to 4% in October, up from 3.8% in September, due to a significant increase in energy prices.
What happened
According to a flash estimate published by Eurostat, the increase in inflation was driven primarily by a 20.8% year-on-year rise in energy prices, which is the fastest increase among the main components of inflation. Services inflation also edged up to 3.3% from 3.2%, while food, alcohol, and tobacco accelerated to 1.6% from 1.3%.
Analysts believe that the data reinforces expectations of a European Central Bank interest rate increase in December, despite the bank holding rates steady last week. The closely watched core inflation measure, which excludes volatile food and energy prices, held steady at 2.5%, broadly in line with economists' expectations.
Economists say that the latest figures suggest that the impact of rising energy costs is beginning to spread beyond utility bills, although broader second-round effects remain limited. The European Central Bank has warned that higher energy prices pose increasing risks to both inflation and economic growth.
