Euro inflation eases to 1.8%, raising expectations that the ECB will cut rates in October

inflation belonging Eurozone moderated until 1.8% in September, four tenths below 2.2% in August, a month in which it in turn fell another four-tenths from 2.6% in July. Also, it’s about data. lowest since May 2021shortly before an inflationary spiral began in the summer of that year, causing the consumer price index in euros to peak 10.6% in October 2022. The data published this Friday by Eurostat is below the 2% that serves as a benchmark for EU monetary policy. European Central Bank (ECB)which encourages expectations that monetary authorities lower rates of interest for the third time this year at their meeting on October 17th.

Your President, Christine Lagardeleft the door open for this this Monday before the Economic Committee of the European Parliament: “Latest developments strengthen our confidence when inflation returns to its target value in a timely manner (2% in the medium term). We will take this into account at our next monetary policy meeting in October.” disinflationHe emphasized that he has “accelerated” over the past two months. In the fourth quarter, he warned: will rise temporarily due to the statistical effect that energy had already started to become cheaper in the last three months of last year, so the year-on-year comparison will be less favourable. But the most important thing, he insisted, was that trend general inflation down.

After the rate cut in mid-September at 3.5%The prevailing expectation in the market was that the ECB would cut rates again next year. 0.25 points at its meeting on December 12. However, since then the number of those waiting cut in OctoberGiven the expected significant fall in the eurozone consumer price index, the growing economic weakness and the drastic cuts recently approved Federal Reserve United States. Lagarde, in any case, insisted on the usual ECB message: the board will make decisions. meeting after meeting depending on the data you receive.

Decreased energy

The moderation of price growth in September was based mainly on energywhich fell 6%, double that of August. food Fresh produce, on the other hand, became 1.5% more expensive, up four-tenths from the previous month. Rising prices for services – the component that worries the ECB most – slowed slightly by a tenth, to 4%. And industrial goods non-energy goods remained at 0.4%. core inflation (excluding more volatile energy and fresh food prices, which the central bank also pays close attention to) fell slightly, from 2.8% in August to 2.7%.

By country, the highest CPI levels were observed last month in Belgium (4.5%), the Netherlands (3.3%) and Estonia (3.2%), which is exactly the opposite of what happened in Ireland (0.2%), Lithuania (0.4%) and Slovenia (0.7%). For their part, the eurozone’s four largest economies had average or lower performance: Germany (1.8%), Spain (1.7%), France (1.5%) and Italy (0.8%).