Eurozone inflation hits 4%, a three-year high, as energy drives half

What happened. By Eurostat's first estimate, euro area prices rose 4.0% on the year in October 2026. September was 3.8%, a year ago 2.1%. Prices rose 0.4% in one month. Euronews says it is the highest level since September 2023 and matched economists' forecast.

What got pricier. Energy: up 20.8% on the year after 18.9% in September, and up 1.4% in the month. It is about 9% of the basket, but by Euronews' math it made up almost half of total inflation. Services rose 3.3%, food, alcohol and tobacco 1.6%, non-energy goods 1.2%. Fresh food (fruit, vegetables, meat) rose 4.6%.

What did not. Core inflation, meaning prices without energy, food, alcohol and tobacco, held at 2.5%. The ECB watches it to see if costly energy is spreading through the economy. So far it is not.

Where it is highest. Lithuania 6.1%, Bulgaria 6.0%, Greece and Italy 5.6% each, Cyprus 5.4%, Belgium 5.2%. Lowest are Malta at 2.3%, Germany at 2.8% and Slovakia at 2.9%. German prices even fell 0.1% in the month: a fuel tax cut runs there from October 1 to the end of the year (Euronews).

What it means for rates. On October 29 the ECB kept its deposit rate at 2.5%, after hikes in June and September. Economists at Oxford Economics and Pantheon, quoted by Euronews, expect a 0.25 point hike in December. Prediction markets put that at about 84%, per Euronews. These are expectations, not a decision.

What we do not know. This is a flash estimate, full data comes on November 18. How long energy prices stay high. Whether higher prices feed into wages and rents.

Hechos confirmados

• Euro area annual inflation was 4.0% in October 2026 by the flash estimate, up from 3.8% in September.^[1]
• Energy prices rose 20.8% on the year, up from 18.9% in September.^[1]
• Inflation without energy, food, alcohol and tobacco held at 2.5%.^[1]
• Services rose 3.3%, food, alcohol and tobacco 1.6%.^[1]
• Italy 5.6% from 4.2%, Germany 2.8% from 3.3%.^[1][2]
• It is the highest level since September 2023.^[2]
• The ECB held its deposit rate at 2.5% on October 29.^[2]
• Eurostat publishes full October data on November 18.^[1]

Implicaciones

• ConfirmadoInflation is twice the ECB's 2% target.
• Nuestra lecturaA December ECB rate hike is now more likely. That is economists' expectation, not a decision.
• Nuestra lecturaFor now the rise rests on energy while core inflation is flat. If core starts rising, the ECB will likely keep hiking longer. That is our reading.

Todavía no se sabe

• Whether the full data on November 18 changes the flash estimate
• Whether the ECB raises rates on December 17
• How long energy prices stay high

A quién afecta

Euro area. People in the euro area, borrowers, savers and euro investors

Fuentes

1. Eurostat: Euro area annual inflation up to 4.0% 4 de noviembre de 2026 · oficial
2. Euronews: Eurozone inflation hits 4%: Where prices jumped the most 4 de noviembre de 2026 · medios