Eurozone inflation surges past 3.8% as energy bills bite

Flash inflation readings released on October 1, 2026 came in hotter than forecast across the eurozone's biggest economies: Germany at 3.3% (highest since December 2023, up from 2.9%), France at 3.4% and Italy at 4.1% on the EU-harmonised measure. The euro-area headline inflation rate rose to 3.80% in September from 3.20% in August, with services prices accelerating to 3.2% and unprocessed food to 4.0%, while core inflation edged up to 2.5%. Energy was the main culprit: German energy prices stood 14.9% above year-earlier levels, reflecting the Middle East-driven oil and gas spike. The Euro Stoxx 50 fell 0.81%, Germany's DAX dropped 0.79% and the euro weakened to $1.1327. The data narrowed the European Central Bank's room to cut rates and sharpened the policy dilemma heading into its autumn meeting.