Tuesday’s preliminary figures for annual consumer inflation for September matched economists’ expectations in a Reuters poll and compared with August’s rate of 2.2 per cent.
Markets anticipate that the ECB will cut benchmark rates by a quarter point to 3.25 per cent when it meets next on October 17, following reductions in borrowing costs in June and September. Investors are pricing in a reduction in borrowing costs of about 1.8 percentage points by the end of next year.
The Eurostat inflation figures were the lowest since early 2021, reflecting lower price pressures across most of the Eurozone, with rates also below the ECB’s 2 per cent medium-term target in Germany, France and Italy.
Inflation in the region peaked at 10.6 per cent in October 2022, following a rise in energy and food prices after Russia’s full-scale invasion of Ukraine.
