September inflation in multiple European countries exceeds expectations, Spain's inflation rate rises to 5%

Driven by a new round of increases in the energy market, the inflation rates of major European economies have soared to their highest levels in years. In September, inflation data for Germany, France, Italy, and Spain all exceeded analysts' expectations. Notably, Spain’s inflation rate reached 5%, the highest since 2023. Fuel costs remain the main driver and are expected to push the overall inflation rate in the eurozone toward 4% later this year. Although economists expected the eurozone’s September inflation data for 21 countries to hit 3.7%, data from several countries this week exceeded expectations, posing further upward risk for inflation. The market generally believes that a rebound in inflation could eventually lead to further interest rate hikes. However, investors’ bets on another rate hike by the European Central Bank in October have actually decreased, mainly because the current inflation shock remains concentrated in the energy sector. European Central Bank President Lagarde also stated that the global bond market sell-off will help contain price pressures.