- Howard Archer, IHS Economics
Inflation returned to the Euro bloc last month, a revised data by the EU's statistics agency showed, led by price increases for fruit and vegetables. According to Eurostat, consumer prices in the currency area edged up 0.1% in October from a year earlier. Excluding volatile components of food and energy, core inflation climbed 1.0% on year, following a 0.8% gain in September. Measured on a monthly basis consumer prices climbed 0.2% in the reported month. The modest upward revision is unlikely to have a major impact on the view of ECB policy makers, when they review the central bank's stimulus programme next month. The ECB strives to ensure an inflation rate of just under 2%. However, energy prices kept inflation from rising further, as the cost declined 8.5% on an annual basis in October, following a 8.9% decrease in the preceding month.
Using the Harmonized Index of Consumer Prices, the barometer used by the ECB to compare price developments in countries across the bloc, the annual inflation rate in Euro zone added 1.1%. In September, it gave up 0.2%, recording the first drop in eight months. Analysts assume that the attacks in Paris could weigh on inflation if it leads to a near-term impact on economic activity across the Euro zone.
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