Cheaper food and fuel pulled down the eurozone consumer price index in October for a fifth month running in annual terms, data confirmed on Monday, but inflation is expected to return in November. Prices in the 16-country area rose 0.2 percent last month compared with September but dipped 0.1 percent year-on-year, European Union statistics agency Eurostat said.
Economists polled by Reuters had on average expected 0.3 percent monthly inflation for October after Eurostat on October 30 estimated the annual fall to be 0.1 percent. The Eurostat data showed energy prices fell 0.2 percent on the month and 8.5 percent year-on-year.
Food prices were flat against September and 1.5 percent lower than a year before. The downward pull from fuel is likely to disappear in November because of a change in the comparison numbers, economists said. In year-on-year terms, fuel for transport, gas, heating oil and food had the biggest downward impact on the index. Month-on -month, it was petrol and food.
Core inflation, which strips out volatile food and energy prices, was 0.3 percent on the month and 1.0 percent year-on-year, the latter down from 1.1 percent in September and 1.2 percent in August. The European Central Bank wants inflation to be just below 2 percent over the medium term and has kept interest rates unchanged at a record low of 1 percent since May. It watches the core number closely for signs of inflationary pressure.
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