Tags: Eurozone | Inflation | Rises | Seen | Under | Control

Eurozone Inflation Rises but Seen Under Control

Friday, 29 Oct 2010 07:40 AM

Eurozone consumer prices rose more than expected in October, an estimate showed on Friday, but remained at the European Central Bank's price stability target and inflationary pressures remained muted, economists said.

The European Union's statistics office Eurostat said consumer prices in the 16 countries using the euro rose 1.9 percent in October year-on-year, against 1.8 percent in September.

Economists polled by Reuters had expected annual price growth to remain unchanged at 1.8 percent.

The ECB wants to keep inflation below, but close to, 2 percent over the medium term.

"Inflation has accelerated sharply from levels of around 1 percent at the start of the year, but this is entirely due to rising food and energy price inflation," said Nick Kounis, head of macroeconomic research at ABN Amro.

"Core inflation has been stable at around 1 percent. Although we do not have a breakdown of the October data, we think that similar trends have remained in place, with underlying inflationary pressures remaining subdued," he said.

He also said that given the slack in the economy, slowing wage growth and the rise in the value of the euro, inflation was unlikely to be a danger for some time.

Separately, Eurostat said eurozone unemployment rose to 10.1 percent in September from a downward-revised 10 percent in August, despite a fall in the number of jobless in the eurozone's biggest economy Germany.

Eurostat said the number of people without a job rose by 67,000 in September against August, to 15.9 million people and by 71,000 people to 23.1 million in the whole European Union of 27 countries.

The rise was mainly due to an increase in unemployment in the third biggest economy Italy, fourth biggest Spain, as well as in Austria.

"September's renewed rise in unemployment reinforces our belief that eurozone labor markets are unlikely to see major overall improvement for some time to come, so unemployment is likely to remain relatively high," said Howard Archer, economist at IHS Global Insight.

"We suspect that unemployment will rise modestly further."

© 2017 Thomson/Reuters. All rights reserved.

   
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Eurozone consumer prices rose more than expected in October, an estimate showed on Friday, but remained at the European Central Bank's price stability target and inflationary pressures remained muted, economists said. The European Union's statistics office Eurostat said...
Eurozone,Inflation,Rises,Seen,Under,Control
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2010-40-29
Friday, 29 Oct 2010 07:40 AM
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