Inflation in the eurozone increased for another month, according to the latest preliminary inflation figures released by Eurostat on Monday morning.
Consumer price inflation, the key measure of price growth, came in at 0.5% year-on-year in October, matching the forecasts of economists polled before the release.
That represents a monthly increase from September, when inflation came in at 0.4%. September’s reading was twice the 0.2% inflation Europe saw in August.
On a year-to-year basis core consumer prices grew by 0.8%, against a forecast of 0.8%, and a previous reading of the same number.
Core prices are an important measure because they strip out the most volatile items — things like fuel and food prices, which are subject to massive variations.
“Looking at the main components of euro area inflation, services is expected to have the highest annual rate in October (1.1%, stable compared with September), followed by food, alcohol & tobacco (0.4%, compared with 0.7% in September), non-energy industrial goods (0.3%, stable compared with September) and energy (-0.9%, compared with -3.0% in September),” a statement released by Eurostat said.
Here’s the chart showing that breakdown:
Monday’s numbers will come as a welcome relief for the European Central Bank, which has embarked on years of unprecedented monetary policy measures to try and boost inflation. The measures currently being implemented by the ECB, including negative interest rates, and more than €1 trillion of quantitative easing look to have finally started doing their job.
Until now the ECB’s negative interest rate policy (NIRP) has not managed to stimulate inflation, although president Mario Draghi has repeatedly said that he and other senior bank officials are convinced the measures are working. The ECB’s official inflation target is close to but less than 2%.