Eurostat Dashboard Shows Eurozone Inflation at 4.0% in October

Key Facts

A Eurostat dashboard shows the eurozone’s annual inflation rate at 4.0% in October, compared with 3.8% in September, according to figures included in the news materials. The reading puts prices above the European Central Bank’s 2% target, the level cited by an Associated Press report on September inflation. However, the detailed October estimate could not be verified on an open official release page, so the 4.0% figure remains attributed to what the Eurostat dashboard displays. The figure comes as the European Central Bank links higher energy prices to upside risks to inflation and downside risks to growth. This makes upcoming data more important in assessing the impact of the energy shock on prices and activity.

The European Central Bank left its key interest rates unchanged in its decision issued on 29 October. The deposit facility rate remained at 2.50%, the main refinancing operations rate at 2.65%, and the marginal lending facility rate at 2.90%. The bank said interest rates would "remain unchanged" at these levels. In its monetary policy statement, it said energy prices "pose upside risks to the inflation outlook and downside risks to the growth outlook." It added that a larger and longer-lasting energy shock could raise inflation and lower growth.

The European Central Bank’s Survey of Professional Forecasters shows that participants raised their annual inflation estimate to 3.0% for 2026 and 2.6% for 2027, while keeping it at 2.0% for 2028. Compared with the previous survey, the estimates rose by 0.3 percentage points for 2026 and 0.4 points for 2027. The survey attributed the upward revisions mainly to higher energy commodity prices and their longer persistence, alongside additional indirect effects. Participants expected the energy shock to last longer than previously estimated and its indirect effects on inflation to be felt particularly in 2027. The survey put those effects at around 0.3 percentage points in both 2026 and 2027, while continuing to expect limited second-round effects.

For core inflation, the survey kept its estimate at 2.4% for 2026, while raising it to 2.5% for 2027 and 2.2% for 2028. These estimates reflect a different path from headline inflation forecasts, which were raised for 2026 and 2027. Forecasters believe that higher energy prices and their longer persistence add indirect effects to inflation. Some of those expected effects are concentrated in 2027. The bank’s decisions, according to its statement, remain data-dependent and are made meeting by meeting, with no advance commitment to an interest rate path.

Eurozone gross domestic product grew 0.4% quarter on quarter in the third quarter of 2026, with annual growth at 1.3% from July to September, according to the Associated Press. The agency reported that quarterly growth exceeded market analysts’ forecast of 0.2%. Performance varied among the major economies: Germany’s economy grew 0.2%, while France’s contracted 0.1% in the same quarter. Spain, the Netherlands and Estonia each recorded quarterly growth of 0.6%. An analyst at Capital Economics said households and businesses had not cut spending because of the Iran war, while an economist at Oxford Economics described the region’s economy as resilient despite geopolitical disruptions and a worsening inflation environment.

The Associated Press report said the European Central Bank’s next meeting is scheduled for December, and that inflation above its 2% target could put a rate increase on the table, potentially raising borrowing costs. That does not mean the bank has made its decision: at its press conference, it said it would "follow a data-dependent and meeting-by-meeting approach" in determining the appropriate monetary policy stance. It also said it was not committing in advance to a specific interest rate path. Energy risks remain a factor in its assessment, given the possibility that the shock could persist and affect prices and growth. The GDP figures cited relate to the third quarter, while the Eurostat dashboard displays the annual inflation reading for October.