Eurozone consumer prices halted a decline in October as the European Central Bank stepped up preparations for more stimulus.
The region’s inflation rate rose to zero from minus 0.1% the previous month, a preliminary report by the European Union’s statistics office in Luxembourg showed on Friday. That’s in line with the median of 34 estimates in a Bloomberg survey. Unemployment decreased to 10.8% in September from a revised 10.9%, Eurostat said in a separate release.
ECB President Mario Draghi has all but promised to ease monetary policy in December. While he acknowledged that domestic demand remains resilient, concerns over a slowdown in emerging markets, a stronger euro and potential repercussions from a drop in oil prices continue to signal downside risks to the growth and inflation outlook.
“It’s an important number, given that Draghi indicated that both headline and medium-term expectations data are going to be key for the outcome of the next meeting,” said Frederic Pretet, inflation and rates strategist at Scotiabank Europe Plc in Paris. “Any stronger-than-expected inflation data reduces–of course–the possibility of seeing a cut in the deposit rate.”
