September: +0.7% m/m, +2.6% y/y (revised from +2.7% y/y)
August: +0.4% m/m, +2.6% y/y
July: -0.5% m/m, +2.4% y/y
June: -0.1% m/m, +2.4% y/y
May: -0.1% m/m, +2.4% y/y
April: +0.5% m/m, +2.6% y/y
ā
FRANKFURT (MNI) ā Consumer price inflation in the Eurozone was
revised down to +2.6% in September on the back of slightly weaker energy
price developments, while the core rates remained subdued, Eurostat
reported Tuesday.
On the month, consumer prices were up 0.7% following Augustās 0.4%
increase. Most analysts expected the downward revision to the annual
rate but had predicted a modestly faster monthly rise.
While energy prices gained 1.1% on the month, its components had
little impact on the overall monthly change, with transport fuels adding
only 0.06 percentage point.
In annual terms, however, the impact was greater. As energy price
inflation reached +9.1% on the year (revised from +9.2%), transport
fuels, electricity, gas and heating oil contributed a combined 0.69
percentage point to the headline rate.
Food, drink and tobacco prices rose 0.2% on the month, bringing the
annual rise to 2.9%, in line with preliminary forecasts.
Excluding the above components, core inflation was steady at an
annual rate of +1.5%. The European Central Bankās preferred measure of
underlying price developments, which removes the effects of energy and
unprocessed foods, eased from +1.7% to +1.6%, its slowest pace since
August 2011.
Cost pressures in the private sector mounted further in September,
the PMI polls showed, with input price inflation hitting a five-month
high (55.1). However, strong competition and subdued demand continued to
weigh on firmsā pricing power, leaving output prices lower for the sixth
consecutive month (47.6).
Nevertheless, consumers are unlikely to avoid the sting of higher
prices in the near term, as Spain has already implemented a VAT hike and
increases in Italy, Finland and the Netherlands are in the pipeline.
A European Commission poll in September showed that households
already anticipate higher costs over the coming 12 months, with the
indicator at its highest level for the year so far.
Still, tepid economic growth, subdued business and household
confidence, and ongoing uncertainty should limit any sustained pick-up
in inflation. Even the VAT hikes are one-off events that should only
delay the eventual deceleration in Eurozone consumer prices.
Supporting this assessment, the same Commission survey showed
selling price expectations still well below long-run averages across
major sectors, despite the modest rise in September.
āUnderlying price pressures should remain moderate given modest
economic growth and well-anchored long-term inflation expectations,ā ECB
President Mario Draghi said last week. āRisks to the outlook for price
developments are broadly balanced.ā
National statistics offices in France and Italy, along with the
German think tank Ifo, forecast Eurozone HICP to slow to +2.3% by the
end of this year and to +2.0% in 1Q 2013.
Core inflation is also expected to ease over the coming months,
reaching +1.4% in the first quarter of next year due āto high
unemployment and weak domestic demand keeping inflationary pressures
moderate,ā the institutes said.
ā Frankfurt bureau: +49 69 720 142; e-mail: twailoo@mni-news.com ā
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