MNI BRIEF: EZ Inflation Higher In Oct, In Line With ECB Target
MNI (LONDON) - Euro area headline inflation rose to 2% year-on-year in October, preliminary data showed, picking up from the more than three-year low of 1.7% in September, Eurostat said on Thursday.
Services inflation was unchanged from September at 3.9% y/y and core inflation on the ECB's preferred reading came in at 2.7%.
The pick-up in the headline number will be of no surprise to policymakers at the ECB, who expected a bounce-back this month. With price gains still in line with the ECB's 2% target, there appears every chance that the “sustainable over the medium term” element of the Governing Council's inflation target will be hit fairly early in 2025.
Overall, with inflation back at 2% and growth across the bloc slightly better than feared in Q3, the ECB looks on target for a further cut in rates at the December policy meeting, although a more gradual 25-basis-point cut would look favourite for now. (see MNI SOURCES: ECB Officials See Rate Expectations As Stretched )
Source: Eurostat