Energy has pushed euro area inflation to its highest since 2023, and the ECB has raised rates twice this year. Strip out energy and food, and inflation is 2.5%. Which number drives policy, which one inflation-linked bonds pay on, and what to watch when the full September figures land on 16 October.
On 2 October, Eurostat’s flash estimate put euro area annual inflation at 3.8% for September, up from 3.2% in August and 1.7% in January. It is the highest reading since September 2023, when the rate was 4.3%.
Two other numbers sit underneath it. Energy prices were 18.8% higher than a year earlier. Inflation excluding energy, food, alcohol and tobacco, the measure usually called core, was 2.5%, little changed from 2.2% in January.
The European Central Bank has raised its rates twice this year all the same. Which inflation number matters depends on what you are trading: the headline is the ECB’s target measure, core shows what sits underneath, inflation-linked bonds pay on a version that excludes tobacco, and a country’s own national index can differ from its harmonised figure by more than a percentage point.
| Euro area, annual change | January 2026 | August 2026 | September 2026 (flash) |
|---|---|---|---|
| All items | 1.7% | 3.2% | 3.8% |
| Energy | -4.0% | 14.3% | 18.8% |
| Services | 3.2% | 3.0% | 3.2% |
| Food, alcohol and tobacco | 2.6% | 1.1% | 1.4% |
| Non-energy industrial goods | 0.4% | 1.2% | 1.1% |
| Core (excluding energy, food, alcohol and tobacco) | 2.2% | 2.4% | 2.5% |
| Item | Value |
|---|---|
| Energy | 18.8% |
| All items | 3.8% |
| Services | 3.2% |
| Core | 2.5% |
| Food, alcohol and tobacco | 1.4% |
| Non-energy industrial goods | 1.1% |
Core excludes energy, food, alcohol and tobacco. Flash estimates are revised in the full release, due on 16 October 2026.
Source: Eurostat, HICP database (PRC_HICP_MINR), read 9 October 2026
Fuel moved most. Eurostat’s index of liquid fuels and fuels for personal transport was 25.9% higher in August than a year earlier, having been 4.0% lower in January.
Eurostat also breaks the August rate into contributions. Services added 1.43 percentage points, energy 1.29, non-energy industrial goods 0.30, and food, alcohol and tobacco 0.22.
The deposit facility rate went from 2.00% to 2.25% on 17 June and to 2.50% on 16 September, the ECB’s first increases since 2023. Announcing the September move, it said that “the conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period.”
Its staff projections, which describe “the ongoing conflict in the Middle East, the blockade of the Strait of Hormuz and continued volatility in energy prices,” see headline inflation averaging 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028. They also put core inflation above the 2% target in every year of the horizon: 2.5% in 2026, 2.6% in 2027 and 2.3% in 2028. The bank says its decisions take into account “the dynamics of underlying inflation,” not only the headline.
Staff expected inflation to peak at 3.6% in the fourth quarter of 2026. September’s 3.8% is a single month and the projection is a quarterly average, so the two are not directly comparable. The baseline also assumes the energy shock dissipates, and the projections say so with “high uncertainty surrounding this assumption”; the staff’s adverse and severe scenarios show higher inflation in 2026 to 2028.
| Item | Value |
|---|---|
| Lithuania | 6.1% |
| Bulgaria | 5.6% |
| Cyprus | 5.2% |
| Luxembourg | 5.2% |
| Greece | 5.1% |
| Spain | 5.0% |
| Belgium | 4.6% |
| Croatia | 4.3% |
| Italy | 4.1% |
| Euro area | 3.8% |
| Ireland | 3.8% |
| Slovenia | 3.7% |
| Portugal | 3.6% |
| Austria | 3.5% |
| France | 3.4% |
| Germany | 3.3% |
| Slovakia | 3.1% |
| Estonia | 3.0% |
| Netherlands | 3.0% |
| Latvia | 2.9% |
| Finland | 2.6% |
| Malta | 2.4% |
All 21 euro area members, including Bulgaria, which joined in 2026. Flash estimates are not published for the six EU members outside the euro area.
Source: Eurostat, HICP database (PRC_HICP_MINR), read 9 October 2026
The same rise in oil prices produced rates from 2.4% in Malta to 6.1% in Lithuania. Among the largest economies, Spain was at 5.0%, Italy 4.1%, France 3.4% and Germany 3.3%. For the whole EU, the latest full figures are August’s: Romania was highest at 6.3% and Sweden lowest at 0.3%.
One reason is how much of each country’s basket goes on motor fuel. Eurostat publishes the weights every national index uses, and in 2026 they range widely.
| Item | Value |
|---|---|
| Luxembourg | 78.6 |
| Hungary | 58.3 |
| Slovenia | 58.2 |
| Lithuania | 57.4 |
| Bulgaria | 50.5 |
| Cyprus | 50.0 |
| Romania | 48.0 |
| Croatia | 47.7 |
| Italy | 47.0 |
| Euro area | 38.3 |
| EU median | 37.0 |
Fuels and lubricants for personal transport equipment (CP0722). The nine highest of the 27 EU member states, with the euro area and the median of the 27.
Source: Eurostat, HICP item weights (PRC_HICP_IW), 2026
A country that gives fuel more weight feels the same pump-price rise more in its headline rate. Weights do not explain everything, though. Slovenia gives fuel slightly more weight than Lithuania, and its September rate was 3.7% against Lithuania’s 6.1%.
The harmonised figures above are built so that every EU country measures inflation the same way. Countries also publish their own national consumer price indices, and the two can drift apart. Cyprus is a sharp example this year:
| Cyprus, 2026 | Harmonised (Eurostat) | National (Cyprus Statistical Service) | Gap |
|---|---|---|---|
| May | 3.5% | 2.6% | 0.9 points |
| July | 4.4% | 2.9% | 1.5 points |
| August | 5.2% | 3.5% | 1.7 points |
| September | 5.2% (flash) | 3.7% | 1.5 points |
Both are official, and they measure different things. Eurostat’s harmonised index “comprises all products and services purchased in monetary transactions by households, both resident and non-resident,” so it includes visitors’ spending. The Cypriot national index covers “resident households and of households that intend to live in Cyprus for at least one year.” Neither office has published a reconciliation of the gap, so we do not attribute it to any one component.
The difference matters because contracts name an index. Cyprus’s cost-of-living wage adjustment, for example, runs on the national index excluding consumption taxes, not on the harmonised rate that appears in European rankings.
| Number | Published by | What it is used for |
|---|---|---|
| Euro area HICP, flash estimate | Eurostat, at the start of the month | The first reading of the ECB’s target measure, with main components for the euro area and its members |
| Euro area HICP, full release | Eurostat, mid-month | Revised figures, all EU countries, and the detailed indices |
| Euro area HICP excluding tobacco | Eurostat, with the full release | Indexation of euro-inflation-linked bonds such as France’s OAT€i |
| National HICP for each country | Eurostat | Comparing inflation across EU countries |
| National consumer price indices | Each country’s statistics office | Domestic contracts and indexation, such as France’s OATi bonds or Cyprus’s wage adjustment |
Four points for anyone who trades around these releases:
Euro area and country figures are from Eurostat’s database, read on 9 October 2026. September figures are flash estimates and may be revised. National Cyprus figures are from the Cyprus Statistical Service’s monthly releases for May, July, August and September 2026, and the gaps are our subtraction. The Cyprus comparison builds on reporting by Cyprus Business Review, whose figures we re-checked against the original statistics.
IG, XM, Plus500, eToro, Pepperstone and IC Markets each serve some clients through a company in Bermuda, Belize, the Bahamas or the Seychelles. We read what those companies offer, and what their clients give up.
IG added customers but expects quarterly revenue 14% lower. eToro's August figures show more trades at smaller sizes. What the filings say, and what they do not yet show.
The CFTC's fraud case against one of the largest prop firms ended in dismissal and sanctions against the regulator. The structural issues it put on the record still define how the industry is judged.
