🇪🇺European October headline inflation reached 4%; energy inflation rose to 20.8%, while core inflation held at 2.5%.

In an interview with Yomiuri Shimbun released by the European Central Bank (ECB), President Christine Lagarde said October headline inflation was 4%. She described the figure as higher than anticipated several months earlier but consistent with market expectations.

Lagarde attributed much of the increase to energy prices, with energy inflation rising from 18.9% in September to 20.8% in October. She cited the Middle East conflict and reduced global refining capacity, while also noting an increase in food inflation.

Core inflation, excluding energy, food, alcohol, and tobacco, remained at 2.5%, unchanged from September. Services inflation increased slightly to 3.3%, still within its range over the previous four months; Lagarde said detailed component data were not yet available to distinguish energy-intensive service effects from broader indirect effects.

In related interview excerpts, Lagarde said the ECB had not observed second-round effects beyond its projections and was monitoring multiyear wage agreements and corporate wage expectations. She reaffirmed data-dependent, meeting-by-meeting decisions and declined to guarantee action in December, while noting that energy futures and long-term interest rates had risen since the September projections.