Eurozone inflation near 6-year high as oil prices spikes
A salesperson presents Euro coins in a shop in Vilnius, Lithuania on Thursday, Jan. 1, 2015. (AP / Mindaugas Kulbis)
BRUSSELS -- Inflation across the 19-country eurozone has risen to its highest level in nearly six years largely on the back of higher energy prices, official figures showed Wednesday.
Statistics agency Eurostat said the headline measure of consumer price inflation rose to 2.2 per cent in the year to October, up from 2.1 per cent the previous month.
October's rate is the highest since December 2012, when inflation was also 2.2 per cent. The last time inflation was higher was in October of that year, when it struck 2.5 per cent.
The main reason behind the increase over recent months has been the spike in energy prices, notably oil. In the year to October, energy prices were 10 per cent higher.
A recent fall in oil prices may mean that inflation will start to trend lower in the coming months.
Though the headline rate of inflation is above the European Central Bank's goal of just below 2 per cent, policymakers have voiced concerns about stubbornly weak underlying price rises. As a result, they are not expected to raise interest rates anytime soon from their super-low levels, even though they are bringing their bond-buying stimulus program to an end.
Stripping out volatile items such as energy, but also food, alcohol and tobacco, the inflation rate rose to 1.1 per cent in the year to October from 0.9 per cent the month before. In itself, that may not signal a new uptrend as core inflation has oscillated between 0.9 per cent and 1.1 per cent since the spring. Rate-setters at the bank will likely want to see several months' worth of data to confirm that lower unemployment and rising wages are pushing up inflation sustainably.
Separately on Wednesday, Eurostat said unemployment in the eurozone remained at 8.1 per cent in September, its lowest level since November 2008 when the world economy was reeling from the global financial crisis.