Source: Sharecast
According to Destatis, the Federal Statistical Office, consumer price inflation is expected to be 3.3% in September. The highest since December 2023, the print was ahead of market consensus for 3.2% and up on August’s 2.9%.
Energy prices were poised to rocket 14.9%, compounding August’s 10.5% jump and July’s 8.3%. Once more volatile food and energy costs are stripped out, core inflation was expected to be 2.4% in September.
Carsten Brzeski, global head of macro at ING, said: "While at face value these inflation numbers are a clear concern for the European Central Bank, the fact core inflation remained unchanged, and services inflation even drifted lower, shows that inflation currently remains an energy price phenomenon.
"Looking ahead, the path of headline inflation remains highly affected by the war in the Middle East and oil prices. In our base case scenario, we are still assuming that the war will continue and relief will only come after the US mid-term elections. Against this backdrop, headline inflation will remain above 3% at least until early 2027."
Month-on-month, inflation was forecast to rise by 0.6%, also ahead of consensus for 0.5%. The harmonised index of consumer prices was also expected to come in at 3.3%. All European Union members use the same methodology to calculate HICP.
Destatis also published labour market data alongside the flash inflation figures, showing employment had eased just 0.1% month-on-month on a seasonally-adjusted basis, or by 0.5% year-on-year, in August, while the seasonally-adjusted jobless rate held largely stable at 6.4%.
Europe’s largest economy, which is heavily reliant on manufacturing, grew by more than expected in the first half of the year. But since then the recovery has shown signs of running out of steam, in large part due to war in the Middle East sending energy prices soaring.