🔻Consequences of the Middle East war; inflation rate rises in euro-area countries

Based on official data, the annual inflation rate in the euro area countries rose to 3.8% in September, the highest level in the past three years. This comes while the figure in the previous month of August was 3.2%.

Developments and clashes in the Middle East, and the subsequent increase in energy prices, have been the main factors behind this rise.

The inflation rate has increased in 21 of the euro-area member countries, yet it still remains above the European Central Bank’s two-percent target, which could further increase the likelihood of another rise in interest rates.

Statistics released by the European Union’s statistics office were slightly higher than economists’ 3.7% forecast.

According to this report, energy prices rose by 18.8% in September, while the figure in August was 14.3%.

The continuation of the war between the United States and Iran has caused significant disruption in the supply of fuel from the Middle East, including via the Strait of Hormuz—a route that is considered one of the world’s most important energy trade chokepoints.

Inflation for food and beverages also rose from 1.1% in August to 1.4% in September.

Previously, euro-area inflation had reached 4.3% in September 2023; a figure that is higher than the 3.8% rate recorded in September this year.