Eurozone inflation dip set to worry ECB
Inflation in the 19 countries sharing the euro rose this month but measures of underlying price pressures dipped unexpectedly, likely fuelling concern at European Central Bank as it prepares to curb stimulus.
With much of its firepower exhausted, the ECB is slowly withdrawing support, hoping it has done enough to kick start growth and inflation, even if price pressures still remain relatively muted. Consumer prices in the eurozone picked up as expected to 2.1 per cent in September from two per cent a month earlier but excluding the cost of food and energy, the rate fell to 1.1 per cent from 1.2 per cent.
This not only missed market projections but also appears to challenge the ECB own view that core inflation would be rising toward the end of the year, finally moving higher after being stuck near one per cent for some time.
An even narrower gauge watched by market economist, which also excludes alcohol and tobacco costs, dipped to 0.9 per cent from one per cent, also well short of expectations.