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Euro-Zone Inflation Rate Stable In October

Wednesday, 16 November 2011
The euro zone's annual inflation rate was stable at 3.0% in October, unchanged from the previous month's three-year high due to increases in energy costs, official data showed Wednesday.


On a monthly basis, consumer prices rose 0.3% from September, the European Union's Eurostat agency said. The figures are in line with market consensus estimate from a Dow Jones Newswires survey of economists last week.

The European Central Bank cut interest rates by a quarter of a percentage point to 1.25% on Nov. 3 even though inflation remains above its target of just below 2%. After the cut, new ECB President Mario Draghi said the single currency area was heading for a "mild recession" and inflation would decline next year, a sign the central bank is likely to loosen policy further.

The euro-zone economy grew just 0.2% on a quarterly basis during the second and third quarters, and more up-to-date surveys of the region's manufacturers and services firms suggest activity is slowing sharply.

The Eurostat data showed annual energy price inflation was stable at 12.4% in October. Annual core inflation, which strips out volatile prices for energy, food, alcohol, and tobacco, was unchanged at 1.6% in October.
News source: Dow Jones News

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