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Eurozone inflation rises 2% in October, exceeds forecasts

2024-10-31 16:00:00, Ekonomi CNA

Eurozone inflation rises 2% in October, exceeds forecasts

Inflation in the 20-nation euro zone rose to 2% in October, preliminary figures released by statistics agency Eurostat showed.

Economists polled by Reuters had forecast a headline figure of 1.9%. The September headline reading was revised up to 1.7% from 1.8% on Oct. 17, below market expectations.

The biggest upward impact on the total rate came from food, alcohol and tobacco, where price growth accelerated to 2.9% from 2.4%.

Core inflation, which excludes these volatile components along with energy prices, was unchanged at 2.7%, slightly higher than expected at 2.6%. Services inflation – an important gauge of domestic price pressures – also remained steady at 3.9%.

The euro rose 0.17% against the US dollar shortly after the data was released, trading at $1.0873, the highest in two weeks.

Thursday's new inflation reading is seen as crucial to judging whether the European Central Bank may consider implementing a 'bitter' half percentage cut in interest rates at its next meeting in December.

The central bank has cut rates three times so far this year, and the base rate has gone from 4% to 3.25%.

Markets are currently pricing in another 25 basis point drawdown in December.

The growth of the Eurozone

Traders are also considering the latest growth figures for the euro zone, which showed a better-than-expected expansion of 0.4% in the third quarter, although analysts forecast further weakness ahead.

The ECB said during the October meeting that the deflation process was "on the right track" and that the slowdown in economic activity in the euro area had increased its confidence that inflation will not increase dramatically. / CNBC





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