Eurozone Inflation Soars To 3.8% In September

By Chris Turner, Frantisek Taborsky, Francesco Pesole and Dmitry Dolgin of ING Think

Economic and Financial Analysis • Oct 2, 2026 at 12:28 PM EDT • Updated Oct 2, 2026 at 5:19 PM EDT

Euro 95 petrol prices have now reached an all-time high, which is weighing significantly on the eurozone's inflation basket.

Source

Ouch. Eurozone inflation blew past expectations in September, soaring to its highest level since 2023. Energy inflation remained the main driver of the higher rate. Despite oil prices remaining somewhat below peaks seen in 2022 and this spring, Euro 95 petrol prices have now reached an all-time high. This is weighing significantly on the inflation basket for the moment.

But eyes are also on other price categories. ECB President Christine Lagarde voiced her surprise at the limited pass-through of higher energy costs to other inflation categories at the last ECB press conference. With food inflation ticking up from 1.1 to 1.4% and core inflation rising from 2.4 to 2.5%, there seems to be some sign of increased pass-through, although this is very preliminary. In fact, food inflation is still lower than in June, and core inflation has been moving between 2.4 and 2.6% since May.

But energy prices are expected to remain higher for some time to come, and the economy is trucking along decently. Early signs of faster wage growth can also be found, for example, in the wage growth indicator from Indeed, which has now risen for five months in a row. With wage growth increasing, concerns about second-round effects remain alive and kicking.

Lagarde sounded somewhat dovish earlier this week, pointing to limited second-round effects and already tighter financial conditions – but the ECB still has work to do with inflation significantly higher in September and broader inflationary pressures remaining.

Disclaimer:

This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. ING forms part of ING Group (being for this purpose ING Group NV and its subsidiary and affiliated companies). The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice. The distribution of this publication may be restricted by law or regulation in different jurisdictions and persons into whose possession this publication comes should inform themselves about, and observe, such restrictions. Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of ING. All rights are reserved. ING Bank N.V. is authorised by the Dutch Central Bank and supervised by the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). ING Bank N.V. is incorporated in the Netherlands (Trade Register no. 33031431 Amsterdam). In the United Kingdom this information is approved and/or communicated by ING Bank N.V., London Branch. ING Bank N.V., London Branch is deemed authorised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.. ING Bank N.V., London branch is registered in England (Registration number BR000341) at 8-10 Moorgate, London EC2 6DA. For US Investors: Any person wishing to discuss this report or effect transactions in any security discussed herein should contact ING Financial Markets LLC, which is a member of the NYSE, FINRA and SIPC and part of ING, and which has accepted responsibility for the distribution of this report in the United States under applicable requirements.

STOCKS IN THIS ARTICLE

Also Mentions:

Sign in to follow stocks

Comments

Back to all articles