Brussels
Eurozone annual inflation dipped to 2.1% in October from 2.2% the previous month, Eurostat’s flash estimate showed Friday, edging closer to the European Central Bank’s 2% target. The modest slowdown was driven by falling energy prices, which dropped 1.0% year-on-year, offsetting a pickup in services inflation to 3.4% from 3.2%.
Core inflation, stripping out volatile food and energy, remained steady at 2.4%, defying forecasts for a decline as higher services costs balanced softer industrial goods prices. This resilience underscores persistent wage pressures in a recovering economy.
The data bolsters the ECB’s cautious stance after holding rates last week. Analysts see limited room for further cuts, with inflation projected to undershoot 2% in 2026 before rebounding to target by 2027. “It’s a benign picture, but core stickiness warrants vigilance,” said ECB watcher Carsten Brzeski.