Eurozone Energy Prices Gradually Feed into Broader Inflation

Dow Jones
Oct 02

1102 GMT - Indirect inflationary effects in the eurozone are gradually emerging, Commerzbank's Vincent Stamer says in a note. "We expect that in the coming months, many businesses--particularly in manufacturing and food production--will pass on higher energy prices to their customers," he says. Eurozone headline inflation surged to 3.8% in September, from 3.2% in August, driven by higher energy costs. While there is little detail in the eurozone figures, national data show that the inflation rate for transportation services, such as passenger flights, rose in September, Stamer says. That's likely already a sign of the indirect effects caused by high energy prices, indicating that core inflation will climb toward 3.0% during the winter from 2.5% in September.

 

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