Brussels – – After approaching the European Central Bank reference target, Eurozone inflation now fell below 2.0 percent, at 1.8 percent, according to preliminary estimates released by Eurostat. Awaiting the final data, due on October 17, a trend is emerging within EU countries using the single currency that will not go unnoticed when the Governing Council decides whether to cut the borrowing costs.
Looking at the calendar, October 17 is when the Governing Council will meet to decide on the monetary policy. A few hours before, the European Statistical Office will provide final data. For now, the figure says Eurozone inflation at 1.8 percent in September, down 0.4 percentage points from August (2.2 percent). Among the main components, there was a decline in services (4 percent compared to 4.1 percent in August), energy (-6 percent, compared to -3 percent in August), and a stable value at non-energy industrial goods (0.4 percent, stable compared to August). There was a slight increase in food and tobacco (2.4 percent, up from 2.3 percent in August).
ECB president Christine Lagarde is not giving anything away for the time being. At the dialogue in the Economic Affairs Committee of the European Parliament yesterday (Sept. 30), she promised that at the October meeting, the ECB would consider the available data and information and, based on this, will decide whether to maintain a restrictive policy or, instead, opt for a new rate cut, perhaps by 0.25 percent. There is no commitment, however, and nothing is a foregone conclusion.
True that, at the moment, the inflation trend is better than the expectations and forecasts of the Eurotower staff. They believed the benchmark target could be reached in mid-2025; instead, it will be sooner. However, Lagarde confessed to MEPs that she fears fluctuations. “Inflation might temporarily increase in the fourth quarter of this year as previous sharp falls in energy prices drop out of the annual rates, but the latest developments strengthen our confidence that inflation will return to target in a timely manner.” Preliminary Eurostat data on inflation in September are a positive but may not be enough to convince for easing.
English version by the Translation Service of Withub
