Final Eurozone CPI for September confirmed at 3.8% y/y, in line with preliminary

• In the euro area, the final September CPI reading was +3.8% on the year, in line with the +3.8% preliminary figure.
• The prior month's rate was +3.2%.
• Final core CPI for September came in at +2.5% year over year, matching the preliminary +2.5% estimate.
• That compares with +2.4% previously.

The revised figures did not alter the initial estimates, confirming that euro area headline inflation jumped to 3.8% in September. That is a clear step up from the 3.2% recorded in August, driven mainly by energy prices. Energy costs climbed 4.0% month on month and 18.9% year on year in September, against an annual increase of 14.3% in August.

The ECB might be able to dismiss the quickening in the top-line reading, but policymakers will find it harder to brush aside renewed increases in core inflation. The core measure's annual rate is now seen at 2.5%, up from 2.4% beforehand. Much of that rise reflects a pickup in services inflation, which advanced to 3.2% in September from 3.0% in August.

With the final data, the message that the ECB cannot ease up as the year draws to a close is reinforced once more. Inflation pressures are building, and with the economic backdrop and fiscal risks becoming more serious, officials face a difficult balancing act going into next year.