Eurozone October inflation revised lower but still a record high
Eurozone inflation was a touch lower than initially estimated in October but still at a record high amid surging energy prices, according to figures released on Thursday by Eurostat.
The annual inflation rate was 10.6%, up from 9.9% in September, but 0.1 percentage point lower than initially estimated.
Energy inflation rose to 41.5% in October from 40.7% in September. This was slightly below the initial estimate of 41.9%. Meanwhile, food, alcohol and tobacco inflation increased to 13.1% from 11.8%.
The lowest annual inflation rates were seen in France, at 7.1%, Spain, at 7.3% and Malta, at 7.4%. The highest were recorded in Estonia, Lithuania, and Hungary, at 22.5%, 22.1% and 21.9%, respectively.
Core inflation in the eurozone came in at 5.0% in October, up from 4.8% the month before and in line with the initial estimate.
Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said: "Looking ahead, we think EZ inflation has peaked, but it will remain elevated for some time. All signs point to falling EZ energy inflation over the coming months, due to the slump in gas prices and the shift in year-over-year basis effects, also in oil.
"That said, we doubt the recent drop in gas prices will be sustained and the lag with which this year’s leap in wholesale gas and electricity prices are feeding through to regulated prices indicate that further nasty surprises could still lie ahead. What’s more, while we think margin compression will bring the core down, the rate will fall only gradually. We look for the rate to remain above 4% out to the middle of next year."