According to preliminary calculations, the inflation rate in the eurozone in September was just as high as in the previous month at +1.5%. At country level, too, consumer price inflation is showing little movement. Indeed, over the next few months the inflation rate should tend to be slightly weaker. Domestic wage pressure remains moderate at most, and the strength of the euro against the US dollar should keep import prices lower and reduce pressure on prices, including prices of energy imports.
In the large EMU member states, which similarly published a flash estimate for September, the change in the inflation rate was unspectacular. According to the harmonised calculation method for Europe, the Harmonised Index of Consumer Prices (HICP), German consumer prices rose by +1.8 per cent compared to the same month in the previous year. Thus the inflation rate was exactly the same as in August. In France the inflation rate increased, but at a lower level, from +1.0 to +1.1 per cent. In Italy it fell slightly by 0.1 percentage point to +1.3 per cent, just as in Spain, where the inflation rate in September was +1.9 per cent.
What trend can we expect for consumer price inflation in the next few months? In terms of external trade two conflicting influences are currently acting on the components of the consumer basket of goods. On the one hand, crude oil has become more expensive again compared to the previous year. The average price of a barrel of Brent was just over USD 55 in September 2017. This represents an increase of more than 19 per cent compared to the same month in the previous year and taken in isolation means rising energy prices. On the other hand, the external value of the euro has increased since the beginning of the year, which is holding back the upward trend in prices of imported goods. Overall, rising energy prices can be expected to push up the inflation rate in the next few months, but only moderately. From other goods and services, by contrast, we hardly expect any significant price increases. Indeed, on the basis of these considerations the inflation rate in the EMU will tend to fall slightly again in the next few months.