Latest data released by Destatis - 1 October 2021

  • Prior +3.0%
  • Core CPI +1.9% vs +1.9% y/y expected
  • Prior +1.6%

Eurozone inflation jumps to a 13-year high, aided largely by a jump in energy inflation (+17.4% y/y) but even the core reading is seen moving up close to the ECB target of 2% now. The trend is likely to persist further amid ongoing supply bottlenecks and capacity constraints, which will heap further pressure on the ECB's 'transitory' narrative.