October flash: +3.0% y/y
MNI survey median: +2.9% y/y
MNI survey range: +2.8% to +3.0% y/y
September final: +3.0% y/y
FRANKFURT (MNI) – Eurozone consumer price inflation in October was
steady at 3.0%, Eurostat reported on Monday, citing preliminary
estimates.
Suggesting a 0.3% monthly rise in prices, October’s annual rate
comes in above most forecasts, though four out of 11 analysts polled had
correctly predicted the result.
An official breakdown will not be made available before November
16. German national figures [+2.8%] showed a mild pick up in household
energy price inflation, while food price inflation remained broadly
unchanged y/y. Spanish data [+3.0%] showed electricity prices stable on
the year.
While inflation is likely to remain well above the European Central
Bank’s medium-term price stability target in the short term, upward
price trends should ease as global growth slows, thereby giving the ECB
more room to address a weakening economy through a looser monetary
policy, should it choose to do so.
The latest PMI reports showed price pressures easing this month:
input costs rose at their slowest pace since late 2009, while output
prices in the private sector fell on average for the second consecutive
month.
Manufacturers and retailers polled by the European Commission
revised down their selling price expectations in October, probably
reflecting efforts to attract future business, while the outlook for
prices in construction remained below average. Consumers also revised
down their assessment of future price trends, with the proportion
expecting prices to trend higher falling to its lowest level since
January.
Next month the ECB will release the results of its latest Survey of
Professional Forecasters, which will include updated inflation
projections through 2013. Results from the previous survey projected
inflation at +2.6% on average this year, slowing to +2.0% in 2012 and
+1.9% in 2013.
— Frankfurt bureau, +49-69-720 142; email: frankfurt@marketnews.com —
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