BRUSSELS (dpa-AFX) - Eurozone inflation accelerated to a three-year high in October on higher energy prices, reinforcing expectations for another interest rate hike.
Inflation increased to 4.0 percent in October from 3.8 percent in September, flash data from Eurostat showed Wednesday. Inflation matched economists' expectations and hit the highest since September 2023, when the rate was 4.3 percent.
Core inflation that excludes prices of energy, food, alcohol and tobacco remained unchanged at 2.5 percent in October.
Month-on-month, the harmonized index of consumer prices posted a 0.4 percent rise compared with a 0.6 percent increase in September.
Energy prices posted the most significant annual increase within the HICP, climbing 20.8 percent. This was followed by services inflation, which rose to 3.3 percent from 3.2 percent.
Food, alcohol and tobacco prices increased 1.6 percent, following a 1.3 percent gain. At the same time, non-energy industrial goods prices climbed 1.2 percent after rising 1.1 percent.
Headline inflation is clearly higher than in the European Central Bank's baseline scenario from September, strengthening the case for another rate hike, ING economist Carsten Brzeski said.
However, he added that muted underlying inflationary pressure suggests that the December hike could also be the last one.
Last week, the ECB lift its key interest rates unchanged after raising them in September as policymakers assess the effects of the previous moves and monitor the impact of turmoil in French bond yields.
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