German inflation slows more than expected in October
EWG•German inflation slowed to 2.8% year-on-year in October, below economists’ 3.1% forecast and September’s 3.3%, as lower fuel prices followed a government tax cut. Core inflation fell to 2.1% from 2.4%.
1. Inflation eases
German inflation slowed to 2.8% year-on-year in October, preliminary data from the federal statistics office showed, compared with 3.3% in September. Analysts had forecast 3.1% for the EU-harmonised consumer price index.
2. Energy and core prices
Energy price growth eased to 12.2% from 14.9% in September, while core inflation, excluding food and energy, fell to 2.1% from 2.4%. A fuel tax reduction introduced at the start of October and due to remain in place until year-end led to a modest decline in fuel prices.
3. Euro zone outlook
Euro zone inflation is expected to reach 3.9% in October, slightly above September’s 3.8%. The European Central Bank left interest rates unchanged on Thursday but hinted at another hike in December, warning that high and rising energy costs were fuelling inflation risks.
