Inflation in the 12 countries using the euro fell to an annual rate of 1.6% in October. That is the lowest seen all year, thanks to falling oil prices. Energy costs were down by 0.5% compared with October last year. It was their first decline since March 2004 according to the figures from the EU statistics agency Eurostat. However higher prices for natural gas and eating out kept inflation from falling further.
Rates vary widely: in Luxembourg prices moved up just 0.6%, while fast-growing Spain was the highest at 3.1% with Ireland next at 2.6%. Europe’s largest economy, Germany, reported 1.2% as did France, the second biggest.
But economists said the slowdown probably will not have an effect on the European Central Bank’s assessment of inflation risks and an interest rate rise in December is still likely.