Eurozone Inflation At 13-Year High
October 01 2021 - 3:15AM
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Eurozone inflation accelerated to the highest level in 13 years
on surging energy prices in September, flash data from Eurostat
showed on Friday.
Inflation advanced to 3.4 percent in September from 3.0 percent
in August. The rate was also above economists' forecast of 3.3
percent. This was the highest rate since September 2008.
Core inflation that excludes energy, food, alcohol and tobacco,
increased to 1.9 percent, as expected, from 1.6 percent in the
previous month.
Overall consumer price growth was driven by the 17.4 percent
increase in energy prices.
Among other components, food, alcohol and tobacco prices were up
2.1 percent and non-energy industrial goods prices grew 2.1
percent. Prices of services rose 1.7 percent. Inflation is set to
continue its upward trend and it will reach 4 percent by November,
Jack Allen-Reynolds, an economist at Capital Economics, said.
Even though inflation is likely to fall sharply next year,
recent strong outturns raise the chance that at the ECB's December
meeting, it will announce an end to the PEPP in March, the
economist added.
With yet another surge in headline inflation, the heat is on for
the ECB's December discussion on whether a pure recalibration of
asset purchases is enough or whether a more significant rewinding
would be better, Carsten Brzeski, an ING economist, said. The
economist said inflation prospects are gradually moving from
'transitory' to 'more persistent'. Some one-off factors should
indeed fade away next year but inflation could turn out to be
stickier than the 'transitory' camp currently assumes, Brzeski
added.
On a monthly basis, overall consumer prices gained 0.5 percent
in September. Final data is due on October 20.
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