Euro-zone inflation due today: last reading was 3.8%
In short
- The last reading was 3.8% (September, up from 3.2%); the October flash estimate is due at 12:00 Sofia time.
- The ECB held at 2.5% on 30 October; the Bank of England is expected to raise rates to 4% on Thursday.
- At 6:45 a.m. gold is £2,953 an ounce (+0.5%).
Eurostat publishes its first estimate of October euro-zone inflation at 12:00 Sofia time today; the previous reading was 3.8%.
What happened
Eurostat publishes its first estimate of October euro-zone inflation today at 12:00 Sofia time (11:00 CET). A month earlier annual inflation was 3.8%, up from 3.2% in August. Core inflation was 2.5% (from 2.4%) and services inflation 3.2% (from 3.0%).
National flash estimates for October, cited by Newsquawk, are mixed: France 3.8% (expected 3.6%), Italy 5.6% (expected 4.6%), Spain 4.9% (from 5.0%), while German inflation eased. We could not confirm a euro-zone consensus from a primary source this morning, so we do not quote one.
The number matters because of interest rates. The ECB held its main rate at 2.5% on 30 October, and ATFX Capital says Governing Council member Joachim Nagel favours a hike in December. On Thursday, 5 November, the Bank of England is expected to raise Bank Rate from 3.75% to 4%, its first increase in more than three years, according to IG. UK inflation was 3.5% in September.
Final services PMI figures for Germany, the euro zone and the UK are also due this morning, and US ADP jobs and ISM services data follow in the afternoon.
European stocks ended Tuesday lower: DAX −0.4%, Euro Stoxx 50 −0.5%, FTSE 100 −1.1% (HawkValue data at the close). The euro trades around $1.124, according to the Associated Press.
What it means for you
The maths: if you have a £200,000 mortgage on a variable or tracker rate, every extra 0.25 percentage points is £500 a year. With UK inflation at 3.5%, £10,000 buys what £9,662 bought a year ago.
Gold is £2,953 an ounce at 6:45 a.m. (+0.5% in 24 hours), and the cheapest 10g bar costs £996 (Baird & Co).
See also: live UK gold prices.
Bottom line
Today’s inflation figure will not settle the ECB’s decision on its own, but it will show whether price pressure is still building. The result is due at 12:00 Sofia time, and the Bank of England decides on Thursday.
Sources: Eurostat · Newsquawk · IG · ATFX Capital · HawkValue data at 6:45 a.m.
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For information only. This is not investment advice.
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