Harmonized consumer prices fell 0.3% compared to the same period of the previous year in October, matching September’s decrease. Inflation thus remained below the European Central Bank’s target rate of near, but under, 2.0%. October’s drop was due a sharp fall in prices for energy and to somewhat lower prices for non-energy industrial goods. On the other hand, prices for services and for food, alcohol and tobacco rose.
On a monthly basis, harmonized prices increased 0.19% in October, above September’s 0.08% rise. Core inflation, which excludes volatile energy and unprocessed foods prices, was stable at September’s 0.4% in October.
Commenting of the release, Bert Coljin, senior Eurozone economist at ING, stated:
“With new lockdowns, the outlook for inflation for the start of the new year will be weakening too, largely justifying the ECB’s very dovish tone at yesterday’s press conference.”
FocusEconomics panelists see inflation averaging 1.0% in 2021, which is unchanged from last month’s estimate, before picking up to 1.3% in 2022.