Eurozone September inflation stable

Eurozone September inflation stable
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Inflation in the eurozone held steady in September from a year earlier at 2.6 percent.

That was the same as in August and slightly lower than the 2.7 percent first estimate by the EU’s statistics office, Eurostat.

Even with the eurozone again in recession, the cost of living has been pushed up by high oil prices.

That also makes it difficult for the European Central Bank to further lower interest rates.

Further cuts to the cost of borrowing seem difficult to justify when inflation has been above the bank’s target of just below two percent for almost two years.

But while energy was again a factor in September, it was clothing that surprised, with prices jumping 14 percent from August and accounting for almost all the inflation pressure in the month, as households bought clothes ahead of the European winter.

But in a sign that Europe’s austerity policies may be bearing some fruit, Eurostat also said exports grew and imports fell in Greece, Italy and Spain in the first seven months of this year.

Italy moved to a trade surplus of 4.4 billion euros in the January-to-July period from a deficit in the same period a year ago, while Greece’s exports jumped 12 percent. Spain saw export growth of 2.0 percent in the period, while imports fell 3.0 percent.

Wage cuts after a decade of a credit-fuelled boom have been painful for millions of southern Europeans, but by toughing it out, they are becoming more competitive as the cost of labour fall.

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