Higher Eurozone Inflation in September Won't Bring The ECB to Change Rates, Says Commerzbank

08:49 AM EDT, 10/01/2025 (MT Newswires) -- The eurozone inflation rate rose from 2.0% year over year to 2.2% in September, as expected, said Commerzbank.

The main reason for this was that energy prices were only 0.4% lower than a year earlier, wrote the bank in a note to client. In recent months, the decline compared with the same month last year had been significantly greater, putting correspondingly greater downward pressure on the overall inflation rate.

Excluding energy prices and the prices of food and beverages, the inflation rate was 2.3% year over year, meaning that this core rate remained unchanged from the previous month.

A look at the subcomponents of the core inflation rate shows that inflation for goods -- excluding energy and food -- was 0.8% for the third month in a row. Ultimately, however, it has hardly changed since mid-2024.

In contrast, the inflation rate for services has been on a downward trend for several months, although this came to a halt in September. In September, the rate rose slightly from 3.1% year over year to 3.2%.

Despite these minor changes, the inflation situation hasn't changed, stated Commerzbank. The inflation rate is close to the ECB's target of 2%, and the recent slower rise in wages suggests that the slight increase in the inflation rate for services isn't the end, but only an interruption in its downward trend.

The bank expects it to continue approaching the 2% mark in the coming months.

On the other hand, there are no signs yet that the inflation rate will fall significantly below the ECB's target, added Commerzbank. Together with a somewhat stronger economy, this is likely to prompt the ECB to leave its interest rates unchanged for the time being.

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