Eurozone factory prices slump to near four-year low in October

City A.M. Reporter
PRICES at factory gates in the 17 countries using the euro declined 0.5 per cent in October against September, the EU’s statistics office said yesterday, the first monthly decline in five months.

Changes in producer prices, unless absorbed by retailers, eventually translate into changes in the consumer price index, which the European Central Bank wants to keep below, but close to two per cent.

The year-on-year figure for producer prices showed a 1.4 per cent drop in October, its lowest since December 2009, after a 0.9 per cent fall in September.

The monthly drop was strongly driven by a 1.4 per cent fall in costs or energy, followed by a 0.2 per cent decrease in prices of non-durable consumer goods.