Eurozone inflation revised lower, reinforcing calls for ECB rate cut

17th Oct 2024 10:32

(Sharecast News) - Eurozone inflation figures for September were revised lower on Thursday, falling further below the European Central Bank's target of 2% to levels not seen since April 2021.

The annual rate of consumer price inflation came in at just 1.7% last month, Eurostat announced. This was down from the flash reading of 1.8% released two weeks ago and well below the 2.2% rate registered in August.

Across the eurozone, services inflation eased to 3.9% from 4.1% the month before, while energy prices tumbled 6.1% after a 3.0% decline the previous month.

The ECB is widely expected to cut interest rates later on Thursday in response to the big slowdown in inflation and concerns about the German economy.

"The ECB has little choice but to cut. Germany's economy is continuing to show signs of struggle. German investor confidence was weaker than expected this week, and a number of Eurozone economies have extremely low levels of inflation," said Kathleen Brooks, research director at XTB.

Inflation slowed to 0% in Ireland, Eurostat said, while low annual rate were also recorded in Lithuania (0.4%), Slovenia and Italy (both 0.7%).

In other news, Eurostat also announced that the eurozone trade surplus in August dropped to its lowest since April 2023.

The trade balance stood at just €4.6bn, down from €19.7bn in July and well below the €17.8bn expected by the market, as exports fell.