Euro Area: Inflation falls more than expected in October

Euro Area Inflation October 2023

Euro Area: Inflation falls more than expected in October

Harmonized inflation fell to 2.9% in October from 4.3% in September. The print represented the lowest rate since November 2021 and surprised markets on the downside. That said, inflation remained stuck above the European Central Bank’s target rate of 2.0%.

October saw weaker increases in prices for non-energy industrial goods, services and food, and alcohol and tobacco. Moreover, prices for energy declined at a sharper pace. Meanwhile, the annual rate of core inflation—which excludes volatile energy and unprocessed food prices—declined to 5.0% in October from September’s 5.5%.

On a monthly basis, harmonized consumer prices rose 0.09% in October—well under 2.0% annualized—below September’s 0.32% increase.

Commenting on the outlook, Bert Colijn, senior economist at ING, stated:

“The numbers start to point to a much better inflation environment, especially now that the economy is clearly performing much weaker than last year and most of the impact of recent hikes is still in the pipeline.”

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