Consumer price inflation in the euro area weakened in September. According to the flash estimate, the annual rate of inflation in the currency area was 0.9 percent. In the previous month it was still at 1.0 percent.
At the country level, there was a uniform downward trend in prices. In Germany, the Harmonized Index of Consumer Prices (HICP) fell from 1.0 to 0.9 percent, in France it fell from 1.3 to 1.1 percent. The inflation rate is significantly lower in Italy and Spain. Spanish consumer prices rose by only 0.2 percent year-on-year compared with 0.4 percent in the previous month. In Italy, the annual rate fell from 0.5 to 0.3 per cent.
The rise in the price of unprocessed food fell sharply and European consumers again had to pay less for energy goods than in the previous year. The fact that unprocessed food was comparatively cheap in September may be due to the fact that harvests after the drought of 2018 were poor in the same month last year and food prices therefore rose more sharply a year ago. The decline in energy prices is mainly explained by the development of the oil price. Despite interim concerns about oil production in Saudi Arabia, the price of crude oil in September was on average around 20 percent lower than a year ago. And this is noticeable at the pumps and in heating. The price increase for industrial goods excluding energy remained unchanged at a low level. In the case of services, prices rose only slightly more sharply than in the previous year.
The price development of food and energy is largely determined by external factors. Monetary policy, however expansive it may be, remains tied. And in the case of other goods and services, inflation has only been moderate for years. So far, the ECB has not been able to change this.