The annual inflation rate in the euro area fell by four tenths in September compared to August, hup to 1.8%, its lowest level since April 2021according to the preliminary estimate published this Tuesday by the community statistics office Eurostat.
The price increase moderated in September in the serviceswhich continued to record the highest inflation among the components of the basket with a rate of 4.0%against 4.1% in August, as well as in food, alcohol and tobacco (2.4% against 2.3% in August). In addition, this accelerated the decline in food prices. energy up to 6.0%compared to the 3.0% decline recorded the previous month, while inflation of manufactured goods excluding energy remained stable at 0.4%.
For its part, the rate of Icore inflation in the euro zone – which excludes the prices of energy, food, alcohol and tobacco because they are the most volatile and serves as a reference for the European Central Bank in its monetary policy – also fell by a tenth, to 2.7 %. In September, the annual inflation rate fell in all countries of the euro with Belgian exceptionwhere it rose from 4.3% to 4.5%, the highest level in the euro zone, Portugal (from 1.8% to 2.6%) and Latvia (from 0.9% to 1.6%); while it remained stable in Croatia (3.0%) and the Netherlands (3.3%). Among the major economies of the euro zone, the rate fell by seven tenths in Spain and Franceup to 1.7% and 1.5% respectively, and was reduced by four tenths in Italy, to 0.8%, and by two tenths in Germany, to 1.8%, according to the harmonized index of Eurostat.
Inflation also fell in Estonia (up to 3.2%), Greece (3.0%), Slovakia (2.9%), Malta (2.1%), Cyprus (1. 9%), Austria (1.8%), Luxembourg and Finland (both 0.8%), Slovenia (0.7%), Lithuania (0.4%); and Ireland (0.2%). In the euro as a whole, it is first time since April 2021 when the rate is below the target level of 2% of price stability of the European Central Bank, which would strengthen the arguments in favor of the institution further reduction in interest rates at its October meeting.
ECB President Christine Lagarde said on Monday that the latest events have reinforced the issuer’s confidence that inflation will return to the target (2%) on time and that it will take this into account during its monetary policy meeting in October. The issuer has already anticipated a drop in inflation in September and, although Lagarde warned that the rate could rise “temporarily” in the fourth quarter of the year, as “drastic falls” in energy prices do not are more reflected in the annual rates, the forecast is that it will continue to fall later. However, the institution insists that decisions on interest rate policy will continue to be taken on the basis of data, including the evolution of the core inflation, which remains seven-tenths above the 2% target.
