Eurozone inflation confirmed at 0.5 pct y/y in October, driven by expensive services

Data released by the European Union's statistical office Eurostat on Tursday showed that Euro zone consumer price growth accelerated slightly in October as expected. Euro zone inflation in October was confirmed its earlier estimate of 0.5 percent rise year-on-year, up from 0.4 percent in September and 0.2 percent in August. On a monthly basis prices went up 0.2 percent in October.

Details of the report showed that rising prices in restaurants and cafes added 0.07 points while rents added 0.04 points to the index. On the flipside, cheaper vegetables and gas subtracted 0.06 points and 0.12 points respectively from the final year-on-year number in October.

Annual inflation in the larger European Union was confirmed at 0.5 percent annually in October 2016, up from 0.4 percent in September and compared to the rate was 0.0 percent a year earlier.

The ECB is set to decide on Dec. 8 whether to prolong its 1.7 trillion-euro ($1.8 trillion) asset-purchase program past the current end-date of March, and with inflation running well below its target, many economists predict an extension. 

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