Eurozone Inflation Hits 4% for First Time in Three Years, Raising Pressure on ECB to Hike Again

Euro zone consumer prices rose to 4% in October, their highest level since September 2023, according to a flash estimate published Wednesday. The reading, in line with Reuters economist forecasts, marked a fourth consecutive monthly increase and was up from 3.8% in September.

Energy costs drove the acceleration, with energy inflation jumping to 20.8% from 18.9% the prior month. Europe, a net energy importer, has seen prices climb steadily, keeping the currency bloc exposed to external shocks.

Inflation varied across the 21 euro zone economies: Lithuania recorded the highest rate at 6.1% while Malta's was the lowest at 2.3%, though all member states registered price increases. The 4% bloc-wide figure sits at twice the ECB's 2% target.

The data sharpens focus on the ECB's final policy meeting of the year. The central bank held its key rate last week after raising it by 25 basis points in September, but the renewed inflation surge reinforces market expectations that another rate hike is under consideration before year-end.