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Euro zone inflation revised up to 0.1 percent in October

Published 16/11/2015, 11:08
© Reuters. A picture illustration shows Euro banknotes in Zenica

BRUSSELS (Reuters) - Euro zone inflation was revised up to 0.1 percent in October, the EU's statistics agency said on Monday, pushed into positive territory by price increases for fruit and vegetables.

Eurostat had previously estimated a zero rate of inflation in October after consumer prices in the 19 countries sharing the euro fell by 0.1 percent year-on-year in September.

Monthly inflation was steady in October at 0.1 percent.

Economists polled by Reuters were expecting zero inflation, in line with the flash estimate, and a 0.1 percent month-on-month reading.

Excluding the most volatile components of unprocessed food and energy - what the European Central Bank calls core inflation - prices were 1.0 percent up year-on-year, from 0.8 percent in September. Month-on-month, they rose 0.2 percent in October.

Despite the return to positive inflation, euro area prices remain subdued, keeping pressure high on the European Central Bank to ease monetary policy further.

The ECB wants to keep inflation below, but close to 2 percent, over the medium term and in March launched a government bond buying programme to flood the euro zone economy with cash and in this way accelerate price growth. Inflation is now stifled by weak economic growth and very cheap energy.

The main factor that kept prices from rising further in October remained energy, the cost of which was 8.5 percent lower than 12 months earlier. The decline was, however, less than the September reading of minus 8.9 percent.

© Reuters. A picture illustration shows Euro banknotes in Zenica

Food, alcohol and tobacco prices rose 1.6 percent in October year-on-year, and inflation in the services sector went up 1.3 percent. Unprocessed food prices were 3.2 percent higher year-on-year, with vegetables up 9.4 percent and fruit 6.2 percent higher.

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