Eurozone inflation remains at a negative -0.3% as energy prices fall

Jonathan Lopez

30-Oct-2020

LONDON (ICIS)–Inflation in the eurozone remained at minus -0.3% in October, unchanged from September, as energy prices posted a fall of more than 8% during the month, the EU’s statistical office Eurostat said on Friday.

During the month, prices for food, alcohol & tobacco rose, according to Eurostat’s first estimate.

Prices for services rose slightly but the rest of components used in the inflation measure fell.

The latest data available for chemicals producer prices in the eurozone, covering August, showed an increase month on month. However, chemicals producer prices remained more than 5% lower year on year.

FAR FROM TARGET
The European Central Bank (ECB)’s remit is to keep inflation in the 19-country currency union close to, but below 2%.

With October’s figure far from that target, and economic growth potentially taking another hit in the fourth quarter as new restrictions are implemented to fight the second pandemic’s wave. Analysts expect the ECB to launch a fresh round of stimulus in December to prop up the ailing economy.

Earlier on Friday, Eurostat published data for GDP growth in the third quarter, showing a rebound of nearly 13% across the eurozone after the sharp falls in the second quarter as strict lockdowns were implemented.

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