Eurozone inflation hits expectations – but it’s still in the ECB’s “danger zone”
Inflation in the Eurozone ticked up a tenth of a percentage point in October, which will do little to allay fears about the state of the economy in the single currency zone.
According to the latest flash estimate (which will be confirmed next month) the rate was 0.4 per cent in October, compared with 0.3 in September. However, the rate is still anaemic, deep in the below-one-per cent region labelled a "danger zone" by European Central Bank chief Mario Draghi.
Meanwhile unemployment in the single currency bloc remained steady, if high, at 11.5 per cent. By way of comparison, the rate is six per cent in the UK and 5.9 per cent in the US.
According to Eurostat, which collects official data on the EU, the services sector is expected to be the strongest annual rate in October (1.2 per cent) while tobacco, alcohol and food should come in at 0.5 per cent compared with 0.3 per cent in September.
Analysts are hoping the Eurozone economy will recover and that the European Central Bank’s move to buy asset-backed securities will help avoid deflation. Eight European economies, including Spain, were suffering deflation last month.
