Inflation in the euro zone fell to 1.7% year-on-year in September, its lowest level since June 2021 and below 2%, the minimum threshold recommended by the European Central Bank (ECB).
This final figure, announced today by Eurostat, revises downwards the provisional data that the Commission’s statistical agency already gave at the beginning of the month, when it placed the price boom at 1.8%. As things stand, inflationary pressure remains half a percentage point below the 2.2% observed in August, marking the best figure since April 2021.
Prices are on their way to moderating, a fact that adds pressure on the ECB to continue cutting interest rates with a view to stimulating the economy. Precisely, today the governing body of that banking institution has to decide whether to cut rates again by 25 basis points, continuing the quarter-point adjustment undertaken in September.
Analysts take the decision for granted, although they warn that, from here on, it will be difficult to predict what the ECB will do until the end of the year, since it has opted for the policy of making decisions gradually. As explained by the president of the ECB, Christine Lagardeprices are expected to rebound in the coming months, and that adds many risks to further rate cuts.
Energy puts downward pressure on inflation
This slowdown in inflation is especially explained by the 6.1% drop in the cost of energy, after falling 3% year-on-year in August. On the other hand, fresh foods became more expensive by 1.6%, five tenths more than the previous month.
By discounting the impact of energy, which is a volatile good, on prices, Eurostat calculates that the inflation rate in the euro zone fell by one tenth in September, to 2.6%. And if the cost of food, tobacco and alcohol are also excluded, the underlying variable remains at 2.7%, which represents a decline of one tenth.
Among the EU countries, in turn, the largest increase in the cost of living corresponded to Romaniawith 4.8%. They are followed by Belgium, with 4.3%, and Poland, with an increase of 4.2% year-on-year. On the other hand, the smallest price increases were observed in Ireland, with 0%; Lithuania, with 0.4%; and Slovenia, which had the best data with an increase of 0.7%.
Spain also expects an increase at the end of the year
In the case of Spain, inflation also continues its downward path, standing at a 1.5% increase in September compared to the same month in 2023, eight tenths below the figure for August, when the variation was 2.3%. , and scoring its best figure since March 2021 (+1.3%).
As Eurostat has done for Europe, the National Institute of Statistics (INE) has explained the decline by the lowering of energy prices, but also by tourist packages and food; For the latter, the interannual rate fell seven tenths, to 1.8%. However, experts warn that in Spain Inflation will follow the trend indicated by the ECB’s analyzes and it is very likely that it will rebound at the end of the year, mainly due to the return of VAT on foods in the basic basket, the prices of raw materials and energy.
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