Euro-area annual inflation rose to 3.8% in September from 3.2% in August, Eurostat confirmed on Friday, with energy making the largest contribution to the overall rate.
Prices across the currency bloc were 0.6% higher than in August. The annual figure compares prices with September 2025, when inflation stood at 2.2%.
The October 16 release confirms the 3.8% headline rate in Eurostat’s earlier flash estimate. Across the wider European Union, annual inflation also reached 3.8%.
Energy and services make the largest contributions
Energy contributed 1.71 percentage points to annual euro-area inflation. Services contributed 1.52 points, compared with 0.29 points from non-energy industrial goods and 0.25 points from food, alcohol and tobacco.
Those contributions measure how much each category adds to the overall inflation rate. They are different from the percentage increase in that category’s own prices.
Inflation excluding energy, food, alcohol and tobacco, commonly called core inflation, increased to 2.5% from 2.4% in August.
For businesses, the split helps distinguish immediate energy exposure from broader price pressure. A transport operator’s costs and a professional services firm’s costs will not necessarily move together, even when both operate in the same country.
National inflation rates remain far apart
Sweden recorded the EU’s lowest annual rate at 1.0%, followed by Hungary and Denmark at 2.1%. Romania had the highest rate at 6.5%, ahead of Lithuania at 6.1% and Bulgaria at 5.6%.
Annual inflation rose in 23 EU countries, remained unchanged in three and fell in one compared with August.
Eurostat uses the Harmonised Index of Consumer Prices, a measure designed to allow comparisons across countries. It tracks household consumer prices rather than the complete cost of operating a company.
A multinational business should therefore avoid applying the euro-area average directly to every market or supplier contract. Local price movements, energy agreements and the goods a company purchases can produce a different cost pattern.
The ECB faces renewed price pressure
The result follows the European Central Bank’s September interest-rate increase, which raised its deposit rate to 2.50%.
In its September decision, the ECB warned that the Middle East conflict was generating inflation pressure. It retained a meeting-by-meeting approach and did not commit to a future rate path.
Higher consumer inflation can squeeze households’ purchasing power while businesses face pressure over selling prices and wages. Higher borrowing costs can complicate investment and refinancing at the same time.
Friday’s figures provide another reading for policymakers. They do not determine the next rate decision, which will depend on the wider inflation outlook and incoming economic data.
