Eurostat reported annual inflation of 3.8% across the euro area in September, as an 18.9% energy-price jump and rising housing costs kept pressure on household budgets.
The final figures show the EU-wide rate was also 3.8%. Both readings were 3.2% in August. The euro-area figure stood 1.8 percentage points above the European Central Bank’s medium-term target of 2%.
Energy prices accounted for 1.71 percentage points of euro-area inflation. Food, alcohol and tobacco prices in the euro area were 1.3% higher than a year earlier. The European Commission links higher fossil-fuel costs to the conflict in the Middle East and the EU’s reliance on imported energy.
Household pressures extend beyond the latest inflation reading. Eurostat said EU rents increased 3.0% between the second quarter of 2025 and the same quarter of 2026. In 2025, housing costs after allowances used at least 40% of disposable income for 7.7% of EU residents. Eurostat also found that 8.8% could not afford to heat their homes sufficiently, while 8.5% could not afford a meal with meat, fish or a vegetarian equivalent every other day.
For vulnerable households, Commission guidance includes targeted income assistance, energy vouchers and cuts to electricity taxes among the options available to member countries. National governments decide whether to put those measures into effect. The Commission’s broader energy response also calls for coordination on gas storage and possible releases from oil stocks.
On Sept. 9, the Commission proposed an Affordable Housing Act that would give authorities a framework for measures in areas facing severe housing pressure. The measure remains a proposal. A related Commission recommendation cites planning and permitting delays, limited public investment and shortages of skilled workers as obstacles to expanding housing supply.
The ECB lifted all three key interest rates by 25 basis points on Sept. 10, citing inflation pressure linked to the Middle East conflict. Its next monetary policy meeting is scheduled for Oct. 29. Eurostat’s October inflation flash estimate is due Nov. 4.
