UBS Sees Eurozone Inflation Peaking at 3.6% Amid Higher Energy Prices

UBS has raised its forecast for Eurozone inflation, predicting it will climb to 3.5% year-over-year in September and peak at around 3.6% in early 2027.

The bank's economists attribute the increase primarily to higher energy prices and a one-off rise in German healthcare costs.

According to UBS, August's inflation reading did not indicate a broadening of inflationary pressures, with underlying measures such as exclusion metrics, trimmed means, and domestic inflation remaining stable or slightly lower.

The bank expects energy prices to continue rising, with a 2.3% month-over-month increase in September pushing annual energy inflation up to 17% year-over-year, its highest level since January 2023.