Inflation across the eurozone climbed to 4% in October 2026, its highest level in three years, as a sharp rise in energy prices pushed the cost of living further above the European Central Bank's target. The figure, released by the European Union's statistics agency Eurostat on Wednesday, 4 November, was up from 3.8% in September and matched the forecast in a Reuters poll of economists.
Image: acediscovery, via Wikimedia Commons (CC BY-SA).
Energy prices drive the increase
Energy remained the main force behind the rise. Annual energy inflation reached 20.8% in October, up from 18.9% in September, as dearer fuel and power fed through to households and businesses. Services inflation edged up to 3.3% from 3.2%, while prices across the eurozone rose 0.4% from the previous month.
Core inflation holds steady
The core measure, which strips out volatile food and energy prices and is watched closely by policymakers, held steady at 2.5%, unchanged from September and in line with expectations. The split between a rising headline rate and steady core inflation suggests the latest jump is being driven mainly by energy rather than a broad acceleration in underlying prices.
A mixed picture across the currency bloc
The headline figure hides wide differences between the 21 countries that share the euro. France saw inflation rise from 3.4% in September to 3.8% in October, while Spain recorded 4.9%, Greece 5.6% and Lithuania 6.1%, placing them among the highest in the bloc.
Pressure builds on the ECB
The reading adds to the pressure on the European Central Bank, which left its key interest rate unchanged at 2.50% on 29 October but warned that rising energy prices posed upside risks to the inflation outlook and downside risks to growth. Markets now expect the bank to raise rates by 0.25 percentage points in December. The ECB expects inflation to stay above 4% for much of the first half of 2027 before falling back towards the low twos.
What it means for households
At 4%, inflation is running at double the ECB's 2% target. Higher energy costs feed into heating, transport and everyday bills, squeezing household budgets across the currency bloc just as winter approaches. If the central bank does lift rates in December, borrowing costs for mortgages and loans would rise too, adding a further strain for families and businesses.
Source: Morningstar reported eurozone inflation at 4% in October, its highest level in three years.
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