Euro zone inflation accelerated to 3.8% in September from 3.2% in August, surpassing economists' 3.6% forecast and reaching its highest rate since September 2023. Energy prices rose 18.8% from a year earlier and accounted for roughly 1.7 percentage points of the headline rate, while services inflation increased to 3.2% and unprocessed-food inflation climbed to 4.0%. Core inflation, excluding energy, food, alcohol and tobacco, edged up to 2.5% from 2.4%, matching forecasts. Harry Woolman, global capital markets analyst at Validus Risk Management, said the increase indicated inflation had broadened beyond energy and made the European Central Bank's October meeting critical. The ECB raised its three key rates by 25 basis points on 10 September, bringing its deposit facility rate to 2.50%, and policymakers next meet in Frankfurt on 28-29 October. Prediction markets assign a 91% probability to another rate increase at that meeting, while the ECB's September projections put headline inflation at 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028.