FRANKFURT, Oct 31 (Reuters) - Euro zone inflation dropped to its lowest level in over two years in October, as energy prices fell and the high interest rates set by the European Central Bank dampened demand, a preliminary reading showed on Tuesday.
Prices grew by 2.9% year on year in October, the slowest pace since July 2021, from 4.3% a month earlier, according to Eurostat's flash estimate.
Inflation started falling sharply last month as the massive increase in energy prices recorded a year earlier impacted the annual comparison.
A measure of inflation that excludes energy, food, alcohol and tobacco also declined - to 4.2%, the lowest level since July 2022, from 4.5%.
All components in the inflation basket recorded smaller increases than a month earlier, although the slowdown was minimal in services, at 4.6% from 4.7%, probably as a result of rising wages.
Persons:
Francesco Canepa, John Stonestreet
Organizations:
European Central Bank, ECB, Thomson
Locations:
FRANKFURT