This is reported in a preliminary report by the European Union’s statistical office (Eurostat).
The energy sector has been the main driver of price rises. Energy prices jumped by 20.8 per cent year-on-year in October, driven by rising costs of gas and motor fuel. Prices for unprocessed food rose by 4.6 per cent, whilst services became 3.3 per cent more expensive. At the same time, core inflation, which excludes volatile energy and food prices, remained stable at 2.5 per cent.
Among the countries in the currency bloc, the highest inflation was recorded in Lithuania (6.1 per cent) and Italy, where the figure jumped to 5.6 per cent. In France, price rises accelerated to 3.8 per cent. Germany was the exception, where the inflation rate slowed to 2.8 per cent thanks to temporary tax relief on fuel. The lowest inflation rate in the region was recorded in Malta at 2.3 per cent.
Current figures are significantly above the European Central Bank’s (ECB) target of 2 per cent. According to analysts, the acceleration in inflation is increasing pressure on the regulator. Although the ECB kept its key interest rate at 2.5 per cent at its meeting on 29 October, the market estimates the probability of a rate rise in December at over 72 per cent. The main constraint for the ECB remains weak economic growth in the eurozone, where GDP rose by just 0.4 per cent in the third quarter.
The European Central Bank does not yet have the scope to combat rising prices by tightening monetary policy — a rate rise is hampered by weakening consumer demand and business activity, as well as deteriorating financial conditions.
This story was translated with the assistance of artificial intelligence.
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