HomeEconomyEurope EconomyEuro Zone Inflation Fell To 4.3% In September, Lowest Level Since October...

Euro Zone Inflation Fell To 4.3% In September, Lowest Level Since October 2021

The annual inflation rate in the euro zone fell to 4.3% in September, the lowest level since October 2021, according to preliminary data released on Friday.

This was a decrease from August’s reading of 5.2%, while month-over-month inflation fell from 0.5% to 0.3%.

Core inflation, which excludes energy, food, alcohol, and tobacco and is closely monitored by monetary policymakers, decreased from 5.3% in August to 4.5% in September.

In September, the European Central Bank decided to increase interest rates to a record level, setting its key rate at 4%. The most recent reading follows this decision.

The move was characterised as a “dovish hike” after the ECB gave its strongest indication to date that its governing council believes interest rates may be sufficiently high to achieve the inflation objective over the medium term.

According to the bank’s most recent macroeconomic forecasts for the eurozone, inflation will average 5.6% this year, 3.2% in 2024, and 2.2% in 2025.

The governor of the French central bank, Francois Villeroy de Galhau, told CNBC this week that it is “premature” to speculate on the timing of the first rate cut.

The ECB forecasts tepid 0.7% economic growth for the bloc this year, followed by 1% and 1.5% growth in the following two years.

The recent surge in oil prices may also pose a risk to the bank’s inflationary forecasts.

The inflationary scenario among European nations remains exceedingly divergent. Price increases in Germany, the largest economy in the euro zone, remain well above target at 4.3% despite the country’s economic contraction.

According to Eurostat, the EU’s statistics agency, the harmonised headline inflation rate for September was 5.6% in France and 3.2% in Spain, while Slovakia and Slovenia experienced inflation rates of 8.9% and 7.0%, respectively.

News Desk
News Deskhttps://businessheadline.in
Business Headline aims at providing you with all the insights around the business world along with creative write-ups and reviews by renowned global personalities. Additionally the Business Blog will help startups and enterprises to develop their business.
- Advertisment -

Most Popular