Euroarea inflation increased again in October to 10.7% year-on-year. This also increases the pressure on the European Central Bank (ECB) to further raise key rates sharply, in the view of economists at Commerzbank.
Inflation rate rises and rises
“The inflation rate in the euro area rose further in October to 10.7%, which was significantly higher than expected. Prices are rising more strongly across the board. The inflation rate excluding the volatile prices of energy, food, alcohol and tobacco rose by 0.2 points to 5.0%.”
“Today’s data increase the likelihood that the ECB will raise its key interest rates again by 75 basis points in December, especially as the euro economy still grew by 0.2% in the third quarter compared with the second quarter.”