Euro Area: Harmonized inflation drops below target in September
Latest reading: Harmonized inflation dropped below the ECB’s 2.0% target in September, coming in at 1.7%, below August’s 2.2%. September’s figure surprised markets on the downside and represented the lowest inflation rate since April 2021. Looking at the details of the release, prices for energy dropped at a quicker rate. Moreover, services price growth moderated.
In addition, the trend pointed down mildly, with annual average harmonized inflation coming in at 2.5% in September (August: 2.7%). Meanwhile, core inflation edged down to 2.7% in September from August’s 2.8%.
Finally, harmonized consumer prices fell 0.07% in September over the previous month, swinging from August’s 0.14% rise. September’s result marked the lowest reading since January.
Panelist insight: ING’s Bert Colijn commented:
“With core inflation slowly dropping at this point, it looks like the 2% target in the medium term is achievable. Recent survey data has confirmed slowing selling price expectations from businesses. This is mainly because of weak demand as the same surveys indicate that growth is slowing from an already modest pace in the second quarter. Since the summer, concerns about inflation have made way for concerns about economic growth.”