Eurozone inflation rises through October

Eurozone inflation has edged up to 0.4 per cent throughout October.

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By :  ,  Financial Analyst

Eurozone inflation has edged up once again over the past month, according to the latest figures.

Statistics from Eurostat showed the flash inflation figure to be up to 0.4 per cent for October from the 0.3 per cent recorded in September. Officials noted that the services sector was the main driver of this overall figure after it grew by 1.2 per cent compared with the 1.1 per cent seen during September.

The figure still fell short of the European Central Bank's (ECB) inflation target of two per cent but it is edging closer. Officials noted, however, that due to the drop in inflation alongside stuttering growth has meant the bank is still under pressure to ensure that it maintains its stimulus measures. It has already reduced its benchmark interest rate to 0.05 per cent and has begun an asset purchase programme.

Describing the boost in inflation as a "small crumb of comfort", Howard Archer, economist at IHS Global Insight, told the BBC: "October marked the 13th successive month that eurozone consumer price inflation has been less than one per cent and there is still a significant risk that extended very low inflation could ultimately morph into deflation, especially given weak oil prices and still muted eurozone economic activity."

The eurozone remains hampered by unemployment. While figures had fallen 12 per cent in September, compared to the same period 12 months earlier, in the 18 countries that use the euro it still remained high. Over 18.3 million are still out of work across the eurozone.

Inflation has also been falling in the UK. A recent report by the Office for National Statistics (ONS) showed that inflation had fallen to 1.2 per cent, a five-year low. The Consumer Prices Index, a scale measuring inflation, has dropped from the 1.5 per cent in August to 1.2 per cent. The Retail Prices Index had also declined from 2.4 per cent to 2.3 per cent.

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