Eurozone Inflation Slows to 2.9% in October, Marking 2021’s Lowest
In October, the Eurozone witnessed a significant slowdown in its annual inflation rate, reaching a mere 2.9%. This dip represents the slowest increase since July 2021, as confirmed by Eurostat. The moderation is stark when compared to the 4.3% surge noted in September.
Across the broader European Union, the overall rise in the cost of living for October eased to 3.6%, a notable drop from the previous month’s 4.9%. This reflects the smallest uptick in prices among member states since September 2021.
Moderation in Eurozone Prices:
October’s uptick in prices was notably lower than other major economies, with the United States moderating to 3.2% from 3.8% in September, and the United Kingdom seeing a decline to 4.6% from 5.7%.
Contributors to Moderation:
The moderation in Eurozone prices primarily stems from the 11.2% drop in energy costs, slightly higher than the initial estimate but a marked contrast to the 4.6% drop observed in September.
Sector-Specific Trends:
Unprocessed food prices increased by 4.5% year-on-year in October, displaying a 2.1-point reduction from September, marking the smallest increase since November 2021. In services, prices rose by 4.6%, one-tenth less than in September.
Underlying Inflation:
Excluding the impact of energy, the year-on-year inflation rate in October stood at 4.9%, down from 5.5% the previous month. Further excluding the impact of food, alcohol, and tobacco, the underlying inflation rate remained at 4.2%, three-tenths less.
International Comparisons:
Among member states, Belgium, the Netherlands, and Denmark recorded the lowest annual inflation rates, while Hungary, Czechia, and Romania experienced the sharpest price increases.
Eurozone Spain’s Differential:
Spain, with an interannually inflation of 3.5% in October, began to have an unfavorable price differential of six tenths compared to the Eurozone. This marks a shift from the previous month, where Spain held a one percentage point advantage.
These figures underscore a notable moderation in the Eurozone’s inflationary pressures, influenced by factors such as energy costs and specific sector trends. The data also illuminates variations among member states, with Spain experiencing a shift in its relative price position within the Eurozone.
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