Eurozone Inflation Near 6-Year High

Eurozone Inflation Near 6-Year High

Eurozone inflation accelerated to a near six-year high in October largely on energy prices and the unemployment rate was at its lowest since 2008, despite the economy growing at the slowest pace in four years.

Inflation rose to 2.2 percent in October from 2.1 percent in September, flash data from Eurostat showed Wednesday. A similar higher rate was last seen in December 2012. The rate came in line with expectations.

Inflation again exceeded the European Central Bank’s target of “below, but close to 2 percent”.

Core inflation that excludes energy, food, alcohol and tobacco, also increased in October, to 1.1 percent from 0.9 percent a month ago. Final data is due on November 16.

The increase in inflation supports the European Central Bank’s judgment that underlying price pressures are gradually building despite the slowdown in activity over recent months, Jennifer McKeown, an economist at Capital Economics, said.

The economist said the central bank will end its asset purchases in December and the recent slowdown in activity is unlikely to cause it to alter its forward guidance.

Among big-four economies, Germany’s harmonized inflation rose to 2.4 percent in October from 2.2 percent in September and Italy’s inflation increased to 1.7 percent from 1.5 percent.

Meanwhile, France’s inflation remained unchanged at 2.5 percent. Likewise, Spain’s rate held unchanged at 2.3 percent.

Another data from Eurostat showed that the jobless rate in the currency bloc remained unchanged at its lowest level in almost a decade in September.

The unemployment rate remained unchanged at seasonally adjusted 8.1 percent in September, which was the lowest since November 2008.

The number of unemployed increased 2,000 from the last month to 13.153 million in September. Compared to last year, unemployment fell by 1.309 million.

The jobless rate among youth aged below 25, also remained stable in September, at 16.8 percent.

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