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It’s a timid increase, but one that brings hope: inflation in the eurozone slightly accelerated in October, according to data published this Monday by Eurostat.
Consumer prices in the 19 countries that have adopted the single currency rose by 0.5% between October 2015 and October 2016 — the highest rate since June 2014, following an increase of 0.4% in September and 0.2% in August.
The stabilization of energy prices has significantly contributed to this, but one could also see it as a sign that the ECB’s asset purchase policy is finally bearing some fruit in supporting demand.
The threat of deflation has thus receded somewhat, even though the increase will need to be sustained over time… and although we are still far from the goal of an inflation rate close to 2%, which is deemed necessary to benefit the economy according to the same ECB.
