Eurozone inflation falls to three-year low

In September, inflation in the euro zone fell to 1.8% year-on-year, its lowest level since June 2021, according to Eurostat. This figure marks a sharp decline compared to August, when inflation was 2.2%, and July, when it reached 2.6%. This unexpected decline even exceeds the forecasts of Factset analysts, who anticipated inflation at 1.9%. One of the main drivers of this decline is falling energy prices. In September, energy prices recorded a drop of 6% year-on-year, accentuating a movement that began in August with a decline of 3%. Fuels, in particular, have seen their prices fall, thereby reducing costs for European consumers.

In addition to energy, the rise in prices of services slowed slightly, reaching 4% in September, a drop of 0.1 point compared to the previous month. On the other hand, diet, including alcohol and tobacco, increased slightly, with an increase of 2.4%, an increase of 0.1 point.

This drop in inflation represents good news for the European Central Bank (ECB), which has been working for months to bring inflation back to around its 2% target. After peaking at 10.6% in October 2022, due to the surge in energy prices in the wake of the war in Ukraine, inflation gradually slowed, making possible a relaxation of monetary policies.