The increase in consumer prices falls below the 2% mark (1.8% over one year), the objective set by the European Central Bank, for the first time since June 2021.
Inflation in the euro zone slowed significantly in September, to 1.8% over one year, its lowest level in three and a half years, thanks to the fall in energy prices, according to figures published Tuesday by Eurostat.
The increase in consumer prices thus falls below the 2% mark, the objective set by the European Central Bank (ECB), for the first time since June 2021.
This decline could encourage the monetary institution to once again lower its interest rates from October, which would help to revive flagging economic growth in Europe.
Inflation reached 2.2% in August, after 2.6% in July, within the 20 European countries sharing the single currency.
The September decline is even sharper than that expected by Factset analysts who were counting on a figure of 1.9%.
Core inflation — that is to say corrected for volatile energy and food prices –, particularly scrutinized by the financial markets and the ECB, also continued its slow decline, to 2 .7% year-on-year, after 2.8% in August, according to the European Statistics Office.
This development is in line with analyst consensus.
The good performance of inflation in September is mainly explained by a fall of 6% over one year in energy prices, including those of fuel at the pump, which had already fallen by 3% in August.
The increase in service prices slowed slightly to 4% (-0.1 point compared to August).
That of food (including alcohol and tobacco) rebounded very slightly to 2.4% (+0.1 point), while the increase in prices of industrial goods stabilized at a very low level (+0 .4% over one year, as in August).
Overall, the increase in consumer prices in the euro zone has been almost divided by six since the record of 10.6% over one year reached in October 2022, when energy prices were soaring in the context of the war in Ukraine.
This trend allowed the ECB to start easing its monetary policy again in the spring.
To stem inflation, the monetary institution had increased borrowing costs at an unprecedented rate from July 2022, at the cost of a sharp slowdown in economic growth.
On June 6, it lowered its key rates, offering a first breath of fresh air to revive real estate credit and business loans. It made a further reduction on September 12 and could continue the movement from its next monetary policy meeting on October 17, according to analysts.
