Inflation experienced a spectacular decline in September, falling by 0.9% compared to August according to Eurostat, the statistical office of the European Union.
Euro zone annual inflation rate fell to 4.3% year-on-year in Septemberafter 5.2% in August, reaching its lowest level in two years, according to Eurostat.
The rise in food prices has also slowed considerably. But this development is however overtaken by an acceleration in energy prices.
September figure falls short of European Central Bank’s 2% targetbut economists believe that if the trend continues, the ECB will not need to raise interest rates further from their already record levels.
The figures for the euro zone, however, remain quite mixed. Germany’s annual inflation fell to 4.3% in September from 6.4% a month earlier, while Spain’s rose to 3.2% from 2.4% in August.
But this inflation is still reflected in the prices of everyday goods, slowing down the economy. This leads to market stagnation and forces consumers to reduce their spending, because salaries do not follow the same trend.