Eurozone inflation hits 4%, three-year high

Eurozone inflation rose to a three-year high of 4.0 percent in October, official data showed Wednesday, keeping price growth well above the European Central Bank's 2 percent target.

The rate for the 21-country euro area was up from 3.8 percent in September. Inflation in the single currency area was last above 4.0 percent in September 2023, when it stood at 4.3 percent.

Eurostat said energy price increases reached 20.8 percent in October, up from 18.9 percent a month earlier. Core inflation, which excludes volatile energy and food prices, stayed at 2.5 percent. Food and drinks inflation rose to 1.6 percent from 1.3 percent.

The October headline figure matched economists' forecast for Bloomberg. Analysts said the data made another ECB interest rate increase likely this year.

Jack Allen-Reynolds of Capital Economics said high inflation concerns looked set to prompt an ECB rate rise in December, but that he suspected it would end the tightening cycle.

The ECB kept its benchmark interest rate on hold last week but left open the possibility of another increase in December.