Euro zone inflation accelerated to 3.8% in September from 3.2% in August, driven by a sharp rise in energy prices, preliminary data from the European Union's statistics agency Eurostat showed on Friday.

The reading puts inflation well above the European Central Bank's 2% target and was largely driven by energy, whose annual price increase accelerated to 18.8% from 14.3% in August.

Services inflation rose to 3.2% from 3.0%, while inflation for food, alcohol and tobacco increased to 1.4% from 1.1%.

Inflation in non-energy industrial goods, however, eased to 1.1% from 1.2%.

Underlying price pressures also picked up, with inflation excluding energy and food rising to 2.5% from 2.4% in August, according to Eurostat.

The acceleration comes as higher energy costs fuel broader price pressures across the euro zone, complicating the European Central Bank's efforts to keep inflation anchored around its target.

The ECB's latest projections, published in September, forecast average inflation of 3.0% for 2026, before easing to 2.1% in 2028. The central bank has warned that higher energy prices could weigh on household purchasing power and economic activity.

Eurostat is due to publish its final September inflation figures later this month. The flash estimate is subject to revision. (ILKHA)