Inflation in the eurozone rebounds to 2% and adds uncertainty to further rate cuts

Inflation in the eurozone experienced a rebound in October, reaching 2%, three tenths above the price increase observed in September, which was the best figure since April 2021.

Thus, the rise in prices remains within that minimum threshold of 2% established by the European Central Bank to consider that inflation is ‘under control’, but confirms the rebound that all experts expected towards the end of the year.

It must be remembered that the ECB has undertaken three rate cuts this year, the last in October, which left the deposit facility rate, which is the one used as a reference, at 3.25%. When the good CPI data in the eurozone for September was known, the reading of all the experts was that pressure was added to the European supervisor to continue with the consecutive cuts of a quarter of a point until the end of the year.

Of course, the counterpart to this argument was that rate cuts put upward pressure on prices. Despite pressure from Germany, which is calling for more cuts to boost its industry, ECB President Christine Lagarde was very clear last month when she insisted that they will not consider the battle with prices won until the CPI stabilizes below 2%.