The annual inflation was still double the European Central Bank’s target, however.<br /><br />The Eurozone's annual inflation rate slowed down to 4.3% year-on-year in September, Eurostat announced on Friday.<br /><br />This figure is the lowest level since October 2021 and should bring slight relief to the millions of households still grappling with high prices.<br /><br />The annual rate shows a spectacular drop from 5.2% in August.<br /><br />Core inflation, which excludes volatile fuel and food prices, fell more than analysts expected — to 4.5% from 5.3%.<br /><br />Energy prices dropped 4.7% in September, while food price inflation remained uncomfortably high at 8.8%.<br /><br />The ECB recently revised its inflation forecasts upward for both 2023 to 5.6% and 2024 to 3.2%, primarily driven by an increased trajectory in energy prices.<br /><br />For 2025, the central bank anticipates inflation to average 2.1%.<br /><br />Slowing inflation is strengthening hopes that the European Central Bank won’t have to further restrict the economy by raising interest rates from already-record highs.<br /><br />The fall in core inflation “reinforces our view that the ECB has finished raising interest rates,” said Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics.<br /><br />The Eurozone's biggest economies show mixed signs<br /><br />Readings across the major economies that use the euro currency were a mixed bag.
