Producer price inflation in the eurozone jumped to 11.1% in September, its strongest annual rise since early 2023, as surging energy costs pushed up the prices factories charge.

Energy drives the surge

Eurostat, the EU's statistics agency, said industrial producer prices rose 2.5% in September from August and 11.1% compared with a year earlier, up from 8.3% in August and above the 10.9% expected by economists. Energy producer prices jumped 7.8% on the month and 30.8% on the year.

Excluding energy, the picture was far calmer: producer prices outside energy rose just 0.1% on the month and 3.5% on the year, suggesting the surge has not yet spread broadly through industrial supply chains.

The national picture

Italy and Spain recorded some of the sharpest annual rises, with producer prices up 17.4% and 18.3% respectively. Bulgaria saw the largest increase in the EU, up 22.9% on the year. Across the EU as a whole, producer prices rose 10.9% on the year.

Why it matters for the ECB

Producer prices are watched as an early signal of consumer inflation, and the figures add to the pressure on the European Central Bank, which held its deposit rate at 2.50% last week while warning that inflation risks were skewed to the upside.

The ECB's next policy decision is on 17 December, and markets have been pricing a high chance of another quarter-point rise.