LONDON — Euro zone inflation hit its highest level in 13 years in September, as the bloc battles surging energy costs.

Inflation headline came in at 3.4%Preliminary data from Eurostat, Europe’s statistical office, shows that last month. It comes after German consumer prices rose by 4.1% in September — the highest level in almost 30 years.

The increase has been driven by higher by surging energy pricesThis is causing concern for policymakers. Nearly 400% has been seen in the rise of front-month prices at Dutch TTF hubs, which are European benchmarks.

This record-breaking run in energy prices is not only remarkable, is not expected to end any time soonMarket nervousness will likely persist through winter according to energy analysts.

France is the latest to take measures to reduce consumer costs. Jean Castex, Prime Minister, said that Thursday’s government will block further efforts to reduce consumer costs. natural gas price increasesBesides, electricity tariffs will rise. But, French customers will see gas prices rise 12.6% by Friday before the new measures take effect.

Spain, Greece, and Italy have taken similar steps to reduce the rise in prices.

We have increased many of our projections over the past three quarters. Things are moving faster, which is good for growth as well as inflation and employment, according to Christine Lagarde (European Central Bank) told CNBCSeptember

It is, therefore, a good package because it indicates that our economies have responded.”

But, she said energy price pressures would likely outlast any inflationary factor, including disruptions in supply chain.

“Energy will likely be an issue that will stay with us for longer. Lagarde explained that the transition from fossil-driven energy sources is happening.

But some economists are questioning whether all of the price pressures are temporary — and if the central bank needs to adapt monetary policy more quickly.

“The recent surge will do very little to bridge the gap between the two inflation camps: one arguing that inflation drivers are transitory and that base effects will disappear or even reverse next year and the other seeing a broad risk of accelerating inflation. We remain somewhere in the middle,” Carsten Brzeski, global head of macro at ING Germany, said in a note on Thursday.

“Constantly higher inflation rates and a high risk that the ECB has actually entered a period in which its longer-term inflation forecasts frequently turn out to be too low, compared with too high in the years prior to the pandemic will put more pressure on how much monetary accommodation the euro zone economy really needs,” he added

Analysts expect the ECB to give more detailsAt its December meeting, the ECB discussed its monetary policy position. The pandemic emergency purchasing program (known as PEPP) is set to expire in March. ECB watchers anticipate a decrease in purchases during the final months.

We believe that inflation will rise even if it stays high for longer. [European Central]Bank will continue to follow its dovish approach,” Andrew Kenningham of Capital Economics, the chief Europe economist, stated in a Thursday memo.