The flash estimate for eurozone inflation in September is 2.7%, up from 2.6% in August, according to Eurostat, the European Union’s statistical agency. Economists polled by Bloomberg had expected a decrease to 2.4%.
The eurozone’s stated inflation target is “2% or less,” but that number has been out of reach for many months now. The eurozone’s all-items index reached 3% in September 2011 and has been 2.4% or higher since April.
Energy costs rose 9.2% in September, the single largest contributor to the inflation index. The food, alcohol and tobacco index rose 2.9%. As bad as the energy rise is, however, it is lower than the 12.4% hike in September 2011.
Bloomberg points out that a September increase in Spain’s value-added tax pushed that country’s inflation rate to 3.5%, and the Italy, too, had a sharp increase in inflation.
The rise in inflation suggests that a downward move in the European Central Bank’s policy rate will not be forthcoming. The ECB has lowered its GDP growth target for 2013 to just 0.5%. It raised its inflation estimate from 1.6% to 1.9%, while expecting inflation to remain above 2% throughout the rest of this year.
Paul Ausick
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.