The flash HICP was unrevised in the final report for September. A 0.5 percent monthly rise in prices was in line with market expectations and put the yearly HICP rate at 2.1 percent, matching last month's preliminary outturn and so still a tick above its final August mark.
However, more importantly for financial markets, September's core measures were also unrevised and so remain soft. Hence, excluding energy, food, alcohol and tobacco, the narrowest measure of annual inflation weighed in at just 0.9 percent, now unchanged from a downwardly revised final mid-quarter outturn. Omitting just energy and unprocessed food, the rate was 0.1 percentage points lower than in August at 1.1 percent, while leaving out only energy and seasonal food the rate was also 1.1 percent, in line with its weaker revised final August print.
Non-energy industrial goods inflation was flat at a lowly 0.3 percent while its services counterpart held steady at 1.3 percent. Energy (9.5 percent after 9.2 percent) provided a slightly larger boost than in August as did food, alcohol and tobacco (2.6 percent after 2.4 percent).
There is nothing really new here for the ECB to contemplate at next week's policy setting meeting (although the downward revisions to the August core rates will hardly be welcomed). QE remains on course to be terminated at year-end, albeit with a still non-zero risk of an extension should underlying inflation continue to fall, and official interest rates look set to remain on hold through summer 2019.
The harmonised index of consumer prices (HICP) is a measure of consumer prices used to calculate inflation on a consistent basis across the European Union. Changes in the index provide an estimate of inflation, as targeted by the European Central Bank (ECB). Eurostat provides statistics for the EU and Eurozone aggregates, individual member states and for the major subsectors. Over the short-term, the central bank focusses on a number of core measures which seek to strip out the most volatile components and so give a much better guide to underlying developments. Amongst these, financial markets normally concentrate upon the narrowest gauge which excludes energy, food, alcohol and tobacco.
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