BRUSSELS (Reuters) - Euro zone producer prices fell more than expected month-on-month in October and decelerated sharply year-on-year, underlining economists' expectations that inflation may have peaked.
The European Union's statistics office Eurostat said prices at factory gates in the 19 countries sharing the euro fell 2.9% month-on-month in October for a 30.8% year-on-year rise, decelerating from an 41.9% annual increase in September.
It is the first time since May 2020 that producer prices have declined month on month. Economists polled by Reuters had expected a 2.0% monthly fall and a 31.5% year-on-year rise.
The overall monthly fall was mainly a result of a 6.9% monthly decline in energy price which pulled down the whole index. Year-on-year, energy price growth decelerated to 65.8% from 108.0% in September.
Producer prices are an early indication of trends in consumer prices, which the European Central Bank want to keep at 2.0% in the medium term.
Consumer inflation in November eased far more than expected, raising hopes that sky-high price growth is now past its peak and bolstering, if not outright sealing the case for a slowdown in European Central Bank rate hikes next month.