Economists at the ECB assume that consumer prices will fall below the target of two percent again after 2022.
(Photo: Bloomberg)
Frankfurt / Luxembourg Inflation in the euro area continued to rise in October. Consumer prices rose by 4.1 percent compared to the previous year, as the European statistical office Eurostat announced on the basis of a flash estimate.
This means that the value is above the target of the European Central Bank (ECB). This is aiming for an inflation of two percent in the medium term. In September inflation was 3.4 percent. On Thursday, the Federal Statistical Office reported an inflation rate of 4.5 percent for Germany for October. This is calculated somewhat differently than the European inflation measure.
The main price driver in October was energy, which was 23.5 percent more expensive than in the previous year. In September the increase there was still 17.6 percent. Excluding energy and unprocessed food, the inflation rate in October was 2.1 percent.
The ECB and many economists argue that the price increase is mainly due to temporary special factors. These include, for example, so-called base effects, which can be seen in energy prices, for example. During the pandemic, the price of oil collapsed dramatically. As a result, it is now correspondingly higher compared to the very low values of the previous year. This effect should expire when the comparative values are higher again. In addition, there are pandemic-related delivery bottlenecks and catch-up effects in consumption.
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Central bank chief Christine Lagarde recently reiterated her view that high inflation is a temporary phenomenon. At her press conference after the ECB Council meeting on Thursday, however, she admitted that the phase of high inflation could last longer than initially expected. However, they continue to assume that the price trend will weaken in the course of the coming year.
More: Inflation in Germany has risen to its highest level since October 1993