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Euro zone Oct producer prices up more than expected

Published 12/02/2009, 05:07 AM
Updated 12/02/2009, 05:12 AM

BRUSSELS, Dec 2 (Reuters) - More expensive energy boosted prices at factory gates in the euro zone by more than expected in October versus the previous month, data showed on Wednesday.

Producer prices in the 16-country area rose 0.2 percent against September and were down 6.7 percent year-on-year, European Union statistics office Eurostat said.

Economists polled by Reuters had on average expected unchanged prices in monthly terms and a fall of 6.8 percent year-on-year.

The Eurostat data showed energy costs rose 1.0 percent month-on-month while prices of intermediate and non-durable consumer goods fell 0.1 percent and 0.3 percent respectively.

Durable consumer goods and capital goods remained unchanged month-on-month. Producer prices are important to the European Central Bank because they show inflationary pressure, or the reverse, early in the pipeline.

The ECB, which meets to decide on interest rates on Thursday, wants annual consumer price inflation to be just below 2 percent, but it was at 0.6 percent in November.

Economists generally expect the central bank to keep its main interest rate unchanged at a record low of 1 percent until the third quarter of next year. (Reporting by Jan Strupczewski, editing by Dale Hudson) ((jan.strupczewski@reuters.com; +32-2-287 6837; Reuters messaging: jan.strupczewski.reuters.com@reuters.net))

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