Eurozone inflation is expected to rise steeply this month on the back of soaring energy costs after German data on Monday showed prices increasing at the fastest pace for four years.

Inflation in the eurozone's largest economy jumped from an annual rate of 1.9 per cent in August to 2.5 per cent this month the highest since June 2001, according to official figures based on data from six German federal states. Economists said eurozone figures, published on Friday, were now likely to show an annual inflation rate of at least 2.5 per cent, and might be as high as 2.7 per cent.