Eurozone inflation hits 13-year high in September as energy crunch and supply bottlenecks send prices soaring

• Eurozone inflation hit a 13-year high in September as energy prices soared and supply chains snarled up.
• It puts pressure on the European Central Bank, which has argued inflation will prove transitory.
• In Germany, Europe's biggest economy, inflation soared to a 29-year high of 4.1%.

Eurozone inflation jumped to its highest level in 13 years in September, as sky-high energy prices and supply-chain bottlenecks sent prices soaring across the continent.

The eurozone's harmonized index of consumer prices rose 3.4% in September from a year earlier, compared to a 3% increase in August, the European Union's statistics office said Friday. September's figure topped economists' expectations of 3.3%.

Inflation in Germany, Europe's biggest economy, meanwhile rocketed to a 29-year high of 4.1%, while French inflation hit a decade-high of 2.7%.

The euro was roughly flat against the dollar to stand at $1.158. The continent-wide Stoxx 600 index was down 0.7%, around its lowest since late July.

Major economies around the world are grappling with jumps in inflation that are adding to pressure on central banks, who have unleashed huge amounts of stimulus during the coronavirus crisis.

Central banks for a long while insisted that inflation will prove "transitory" and will start to cool in a year or so as the economies find some balance after reopening rapidly.

But now they're not so sure. The Bank of England last week said it expects inflation to remain at the highest levels in a decade well into 2022 and the US Federal Reserve has expressed surprise at the strength of price rises. Both have said they could start cutting back support soon in response to those increases.

Read more: A $31 billion investment firm with a killer track record of beating market crashes lays out 4 ways to play a 'new regime' that will bring dramatic re-ratings for many top stocks as inflation heats up

A global energy crunch saw oil top $80 a barrel for the first time in three years this week, while COVID outbreaks and strong demand have rocked global supply chains, pushing up the prices of raw materials and other goods.

Friday's figures put pressure on the European Central Bank, which has struck a more dovish - that is, pro-stimulus - tone than many central banks. The ECB expects inflation to drop back sharply in 2022, but economists said strong price rises raise questions about its forecasts.

"We would no longer be surprised to see the ECB reducing its asset purchases in 2022 to a larger extent than thought after the August meeting," Carsten Brzeski, global head of macro at ING, said.

However, Chiara Zangarelli, fixed income analyst at Nomura, said the Japanese bank reckons inflation will drop back to just over 1% by the end of 2022 as energy prices cool. For that reason, the ECB may in fact increase asset purchases in December, she said.