By John Ikani
Inflation in the eurozone saw a continued easing in October, reaching its lowest point in over two years, as reported by Eurostat in Luxembourg.
The annual inflation rate dropped to 2.9%, down from September’s 4.3%, according to a second estimate released on Friday.
Consumer prices in October experienced a modest increase of 0.1% compared to the previous month.
The decline brings the inflation rate in the single currency area back below three percent for the first time since the summer of 2021.
Core inflation, excluding the influence of volatile energy and food prices, also experienced a dip, with the annual rate falling to 4.2% from the previous month’s 4.5%.
Many economists consider core inflation a more accurate reflection of underlying inflation trends than the overall rate.
Falling energy prices played a significant role in the decrease in inflation. Energy prices fell by 11.2% in October compared to the same month last year.
Although food prices remained notably higher than the previous year, the rate of food inflation slowed from 8.8% to 7.4%.
The prices for services showed only a slight decrease compared to the previous month.
In terms of inflation trends, there remained considerable variation among eurozone countries.
Slovakia reported the highest annual rate at 7.8%, while Belgium (-1.7%) and the Netherlands (-1.0%) experienced price decreases. In Germany, inflation stood at 3.0%.
Despite the notable decrease in inflation, the European Central Bank’s (ECB) medium-term inflation target of 2% is still being surpassed.
The ECB had previously raised its key interest rates significantly throughout the year to address high inflation but recently opted to keep them unchanged.
It’s worth noting that eurozone inflation reached its peak of 10.6% in October last year, following Russia’s invasion of Ukraine, which led to a surge in energy prices.
