Euro-area inflation hits a three-year high, increasing ECB pressure

Inflation across the 21 countries using the euro rose to 3.8% in September from 3.2% in August, according to Eurostat’s preliminary estimate—above economists’ 3.6% forecast and the highest reading in three years. The immediate driver was energy, whose prices were 18.8% higher than a year earlier, while services inflation also edged up to 3.2%. That distinction matters to the European Central Bank: an energy shock can fade, but price increases that spread into services and wages are harder to reverse. Core inflation, which strips out energy and food, rose only to 2.5% from 2.4%, offering some reassurance; still, overall inflation is far above the ECB’s 2% goal and strengthens the case for another interest-rate increase.