Symbolic imageEurozone inflation reaches 4% as energy prices climb
Eurozone inflation rose to 4.0% in October from 3.8%, a three-year high and double the ECB's target. Analysts expect another rate hike in December.
Eurostat's flash estimate on Wednesday, 4 November, showed energy prices 20.8% higher than a year earlier, up from 18.9% in September, as the Middle East war pushed up costs. Core inflation stayed at 2.5%, while services rose to 3.3% and food, alcohol and tobacco to 1.6%. Economists had expected the rise. The ECB held rates last week but opened the door to a December hike. ING's Carsten Brzeski said the data bring it a step closer, while Capital Economics' Jack Allen-Reynolds suspects that would end the tightening cycle.
Italy up, Germany down
Harmonised inflation accelerated in Italy (4.2% to 5.6%) and France (3.4% to 3.8%), but slowed in Germany (3.3% to 2.8%) and Spain (5.0% to 4.9%), according to Eurostat data cited by Politika.
Outlook
Handelsblatt says a December hike would lift the deposit rate to 2.75% and that inflation is unlikely to ease before spring 2027 at the earliest.
Sweden also raises rates
The Wall Street Journal reports that Sweden's central bank raised rates in response to the war.