Eurozone inflation is accelerating at an ever faster pace. Confirmation came today, Friday, October 2, 2026, with the release of the preliminary reading of the September consumer price index.

Prices rose 3.8% from a year earlier, confirming fears that the European Central Bank (ECB) will be forced to raise interest rates again, after the two hikes it has already delivered this year.

Eurozone inflation hits 3.8% in September as energy prices surge 18.8%

Eurozone inflation picked up further in September, running well above the 3.2% recorded in August, according to Eurostat’s flash estimate.

As expected, the main driver was energy, where prices jumped 18.8%, compared with +14.3% in August.

Services inflation also strengthened (+3.2%, versus +3% in August), as did food, alcohol and tobacco (+1.4%, versus +1.1%). Prices of non-energy industrial goods rose 1.1%, a slight slowdown from +1.2% in August.

Excluding the most volatile components, energy and food, euro area core inflation came in at 2.5% year over year. That is also clearly above the ECB’s 2% target.

Can the ECB afford a third hike in 2026?

At its most recent meeting, on September 10, the ECB announced the second interest rate increase of 2026. The 25-basis-point move lifted the deposit facility rate, the main refinancing operations rate and the marginal lending facility rate to 2.50%, 2.65% and 2.90%, respectively.

With eurozone inflation approaching 4%, pressure is mounting on the ECB’s Frankfurt headquarters to hike again.

For now, though, markets are still betting on a deposit rate holding at 2.50%, following the two hikes announced on June 11 and September 10, with a probability of roughly 71%.

The next rate increase is seen as more likely at the Governing Council’s final meeting of the year, scheduled for December 17. The probability of a December hike that would take the deposit rate to 2.75% hovers around 65%.

A third hike before year-end looks plausible above all in light of other data released this week, which confirmed the surge in inflationary pressure. France’s harmonized inflation gauge rose to 3.4% year over year in September, from +2.6% in August. Italy fared worse, with inflation jumping to 4.2%. Germany’s rate also firmed, to 3.3% in September from +2.9% in August. Spain was the biggest shock, with inflation soaring to around 5%.

ING sees a third hike, but doubts the market’s 2027 outlook

Economists at ING laid out the case for a third tightening, citing oil prices above $100 a barrel and an ECB mindful of its historic mistake in 2022, when it reacted too late to that year’s inflation shock.

The experts specified that a December hike would nonetheless be “insurance” in nature, given the “growing risk of causing unwarranted damage to the economy.”

For that reason, they consider the market’s outlook, which points to at least two more hikes in 2027, to be excessive. ING’s other reason for rejecting expectations of two further tightening moves next year is its belief that the ECB’s GDP growth projections are “very optimistic.” The analysts said they wonder whether the negative growth impact from oil prices and higher interest rates “could be larger.”

On growth, former ECB president and former Italian prime minister Mario Draghi himself urged Lagarde in recent hours not to raise rates too much.

That said, market bets imply a 49% probability that the ECB hikes at its February 4, 2027 meeting, and a 40% probability that another tightening is announced after the March 18 meeting next year. In that case the deposit rate would rise to 3.25%, 75 basis points above current levels.

Editor’s note

This article was originally published in Italian on money.it by Laura Naka Antonelli on October 02, 2026 as «Inflazione euro balza al 3,8%. Quante volte la BCE alzerà ancora i tassi?». It has been translated and adapted for an international audience by the Money.it International desk.