LONDON (CNBC) — Euro zone inflation hit its highest level in 13 years in September, as the bloc battles surging energy costs.
Headline inflation came in at 3.4% last month, according to preliminary data from Europe’s statistics office Eurostat. This was the highest level since September 2008 when inflation stood at 3.6%. It comes after German consumer prices rose by 4.1% in September — the highest level in almost 30 years.
The rise has been driven higher by surging energy prices, deepening concern among policymakers. The front-month gas price at the Dutch TTF hub, a European benchmark, has risen almost 400% since the start of the year.
What’s more, this record run in energy prices is not expected to end any time soon, with energy analysts warning market nervousness is likely to persist throughout winter.
France has become the latest country to step up measures to mitigate the costs for consumers. Prime Minister Jean Castex said Thursday the government would be blocking further natural gas price increases as well as rises in electricity tariffs. However, before these measures kick in, gas prices will rise by 12.6% for French consumers as of Friday.
Italy, Greece and Spain have also taken steps to address the price increases.
Central bankers are of the opinion recent spikes in inflation are “transitory” and that price pressures will ease in 2022.
“We have been revising upward many of our projections in the last three quarters. Things have picked up faster and that is true for growth, that is true for inflation, and that is true for employment,” European Central Bank President Christine Lagarde told CNBC in September.