More expensive food drives October euro zone inflation

More expensive services and food were the main drivers of consumer price growth in the euro zone in October, data showed today, as the EU’s statistics office confirmed year-on-year inflation slowed sharply.

Eurostat said consumer inflation in the 20 countries using the euro decelerated to 2.9% year-on-year in October from 4.3% in September after prices rose 0.1% month-on-month.

Price rises in the services sectors, the biggest part of the euro zone economy, added 1.97 percentage points to the final year-on-year number and more expensive food, alcohol and tobacco added another 1.48 percentage points.

A sharp fall in energy prices subtracted 1.45 points from the final number while non-energy industrial goods added another 0.9 percentage points.

The European Central Bank wants to keep inflation at 2% over the medium term and has raised interest rates to record highs to slow down price growth, at the same time slowing euro zone economic growth.

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