Eurozone inflation rises to 4.0% in October, hitting highest level in 3 years
Eurozone inflation rose to 4.0% in October — up from 3.8% in September — as energy prices continued to climb.
The Eurozone doesn't cover every country in Europe, just those that use the euro as their currency.
The 4.0% figure is Eurostat's flash estimate, its first reading of how much consumer prices rose over the past year. A year ago, the rate was 2.1%.
It is the highest rate since September 2023, Eurostat's data shows. Energy prices in particular were 20.8% higher YoY.
Core inflation — which leaves out energy, food, alcohol, and tobacco — held steady at 2.5%, suggesting that the latest acceleration in headline inflation is largely energy-driven.
The other main components rose slightly:
- Services: 3.3%, up from 3.2%
- Food, alcohol, and tobacco: 1.6%, up from 1.3%
- Non-energy industrial goods: 1.2%, up from 1.1%
Italy had the biggest jump among the large economies, to 5.6% from 4.2%. Germany's rate eased to 2.8%.
The reading strengthens the case for a rate hike at the European Central Bank's December meeting. The ECB held its deposit rate at 2.5% last week, and a December move would be its third hike this year, Reuters reports.
"From today's perspective, an interest rate hike in December is very likely necessary," said Joachim Nagel, president of Germany's central bank, according to Reuters. He added that the surge comes mainly from energy, with little sign yet that it is feeding into wages and other prices.
The ECB expects inflation to stay above 4% in the coming months, more than twice its 2% target, and to drop quickly from early spring, Reuters reports.
The German 10-year yield was little changed at 3.31%, as of 5:19 a.m. ET.
Eurostat publishes the full October data on November 18. The ECB announces its decision on December 17.
Sources & Further Reading
- "Euro area annual inflation up to 4.0%." Eurostat. November 4, 2026.
- "HICP - monthly data (annual rate of change)." Eurostat. November 4, 2026.
- "Bundesbank's Nagel joins ECB chorus backing December rate hike." Reuters. November 3, 2026.
- "Meeting calendars for the Governing Council and General Council." European Central Bank. November 4, 2026.
This article was drafted with the help of AI. Gabe Dunsmith fact-checked, edited and published the article and is responsible for its accuracy and quality. How we use AI
