The annual rate of inflation in the eurozone fell to its lowest level in three months in October as energy, transport and entertainment costs declined. Eurozone inflation rose 0.1pc in October from September but declined to 2.0pc on a year-on-year basis, the target set by the European Central Bank (ECB). Inflation was 2.2pc in September.
Economists surveyed by the ECB expect inflation to fall to 1.6pc next year from an average 2.0pc this year. Jean-Claude Trichet, the bank's new president, also expects inflation to moderate in the medium term but said he European anticipates some further "stickiness" in the short term. In October, energy prices fell 0.4pc, while transport costs fell 0.3pc and prices in the recreation and culture category eased 0.7pc.
Ireland continued to have the highest inflation rate, at 3.3pc as measured by the HICP, followed by Italy and Portugal on both 2.8pc and Spain at 2.7pc. The lowest rate was recorded in Finland and Germany, where inflation has eased to 0.9pc and 1.0pc, respectively. //www.fxcentre.com