Oil Shock Hits Europe as Inflation Rates Soar

Seven months after the Iran war began on February 28, Europe's inflation reports are showing signs of an oil shock. Spain's harmonized inflation rate hit 5% in September, its highest level since February 2023.

The country's national consumer price index rose 4.9% year-on-year, with vehicle fuel prices climbing this September after falling a year earlier. Package holiday prices dropped less than in 2022.

France and Poland also posted faster price growth, with energy costs leading the rise. France's harmonized inflation jumped to 3.4% from 2.6%, its fastest pace in more than two years. Poland's inflation climbed to 4.0% from 3.4%, taking it above the central bank's tolerance band for the first time since mid-2025.

Transport costs in Poland had already risen 11.2% due to higher fuel prices. The National Bank of Poland has held its benchmark at 3.75% since March, according to Bloomberg.