Monetary policy: Inflation reaches four percent – further interest rate increases by the ECB are becoming more likely

Frankfurt. Inflation in the euro zone has reached the four percent mark for the first time in three years. A further interest rate hike by the European Central Bank (ECB) in five weeks is increasingly likely, especially since inflation is unlikely to gradually ease until spring 2027 at the earliest.

Goods and services rose in price by 4.0 percent in October compared to the same month last year. This emerges from a flash estimate from the statistical office Eurostat on Wednesday morning.

In September the inflation rate was 3.8 percent. Economists had expected another increase. They recently raised their forecast in view of the price pressure in individual euro economies - in Italy, for example, inflation has jumped to 5.6 percent.

The ECB is targeting a rate of two percent. New data supports expectations that monetary authorities will raise interest rates again at the end of the year. The deposit interest rate would then be 2.75 percent. “Today’s inflation data brings the central bank one step closer to raising interest rates in December,” said ING chief economist Carsten Brzeski.