Eurozone: Core inflation remains subdued – Lloyds Bank

Eurozone ‘core’ inflation, which excludes food and energy, fell unexpectedly to 0.9% in October from 1.1% and was driven primarily by a fall in services inflation to 1.2% from 1.5% as the headline rate fell to 1.4% from 1.5%, explains the research team at Lloyds Bank.

Key Quotes

“We still expect underlying price pressures to gradually build over the coming quarters, helped by strong economic activity. In the meantime, core inflation remains subdued, necessitating further ECB policy stimulus. For November, we anticipate a rise in ‘core’ inflation to 1.0%, helped in part by a rebound in transport prices. The headline measure is expected to rise to 1.6% from 1.4%.”