Eurozone inflation September 2022

The harmonized inflation rate jumped to 10.0% in September from August’s reading of 9.1%, moving further above the ECB’s target rate of 2.0%, and marking the highest reading in the series’ history. The September result was due to rapid increases in the prices of energy, food, alcohol, tobacco, and non-energy industrial goods and services.

On a monthly basis, CPI rose 1.3% in September, above 0.6% in August. The annual rate of core inflation, which excludes volatile energy and unprocessed food prices, rose to 6.1% in September from 5.5% in August — also the highest number since records began.

Commenting on the implications for the ECB’s monetary policy stance, Bert Collin, chief economist at ING noted:

‘Differences in inflation between countries are becoming more significant […]. Naturally, the difference between countries will complicate the picture for the ECB, but with the current high inflation rates, the path is clear: the ECB is set to rise significantly in the upcoming meetings to reach neutrality and perhaps quickly afterwards.”

Our group sees inflation at 8.1% in 2022, 0.4 percentage points higher than last month’s estimate, before declining to 5.1% in 2023.

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