There were no surprises: prices are not weakening. The National Institute of Statistics (INE) confirms that inflation increased by 3.1% in October, the highest level of the entire year, according to final data published on Friday. The rebound is largely due to rising costs of electricity, international flights and rail transport, and is partially offset by declines in post-season package tours and fuel prices, reflecting moderation in oil prices per barrel.
The INE also confirms the rise in core inflation, which excludes the most volatile elements such as energy and fresh food, up to 2.5%, a tenth above that of September. Food remains relatively stable, as increases in fresh or chilled fruit, eggs and olive oil are offset by declines in fresh legumes and vegetables, bread and dairy products.
The INE had already anticipated the October data two weeks ago. The final record confirms the acceleration of prices, which have been following an upward trend for five months now and have not reached similar levels since June last year. Tensions come from multiple fronts. After the blackout, electricity prices have moved to higher levels than a year ago, services are exerting greater pressure than expected and food inflation is not easing.
The strength of the economy, paradoxically, does not even help the market to cool. Activity grows at a sustained pace, 0.6% in the third quarter, driven by domestic demand and investments.
In the euro zone, however, prices moderated in October, according to the latest provisional data published by the European statistics office Eurostat. Inflation fell to 2.1%, a tenth less than in September. The result is in line with the reference rate of the European Central Bank (ECB) and supports the rate cuts inaugurated by the organization led by Christine Lagarde.
