Eurozone Inflation Surges, Putting ECB Under Pressure to Raise Rates

Inflation accelerated far more sharply than expected in several of the eurozone’s largest economies in September, adding to pressure on the European Central Bank to raise interest rates.

The surge was driven by an energy price crisis sparked by the war in Iran. Higher energy costs have intensified inflationary pressures across the economies affected.

The September readings complicate the outlook for monetary policy in the currency bloc, with unexpectedly strong price growth sharpening the focus on the ECB’s response.

Raising interest rates can help curb inflation by cooling demand, but it cannot directly resolve disruptions behind an energy price shock. That leaves the central bank facing a difficult balance as pressure for tighter policy builds.