(Sharecast News) - Inflation across the eurozone eased as expected in October on the back of a sharp slowdown in food, alcohol and tobacco price pressures and a steeper rate of energy deflation.
The consumer price index increased by 2.1% year-on-year this month, according to Eurostat on Friday, down from 2.2% in September, which was the highest rate since April.

Service-sector inflation ramped up to 3.4% in October from 3.2% the month before. However, inflation rates across all other categories decreased.

Food, alcohol and tobacco inflation slowed to 2.5% from 3.0%, non-energy industrial goods inflation slowed to 0.6% from 0.8%, while energy prices fell by 1.0% following a 0.4% decline.

When excluding volatile items like food, alcohol, tobacco and energy prices, core inflation remained steady at 2.4%, in line with the previous month.

Pierre Roke, analyst at Validus Risk Management, said the slowdown backed up the European Central Bank's decision on Thursday to keep interest rates unchanged.

The data suggests policy is "well balanced" and should provide "reassurance" that policymakers' 2% inflation target remains achievable, Roke said.

"While some risks have eased following the EU-US trade deal, and a strong euro has helped keep imported prices down, headwinds within Europe persist. France's unresolved budget issues and ongoing political tensions, alongside Germany's slowing growth and a softer labour market, remain key risks for the bloc's outlook."

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