French inflation cools more than expected in September as energy prices, transport costs decline

France's harmonized ostentation complaint fell sharply successful September, preliminary data from nan National Institute of Statistics and Economic Studies (Insee) showed Friday.

Harmonized user prices successful nan euro zone's second-largest system came successful astatine 1.5% successful September, down from 2.2% successful August. The Harmonized Index of Consumer Prices (HICP) is adjusted for comparison pinch different euro area countries.

The HICP reading, which came successful beneath nan 2.0% expectations of economists surveyed by Reuters, is apt to ramp up unit connected European Central Bank (ECB) policymakers to return measures to stimulate nan broader economy.

The ECB cut liking rates by 25 ground points to 3.5% earlier this month, resuming a rate-cutting rhythm that started pinch a landmark move successful June.

The euro fell connected nan news, earlier paring losses. It traded astatine $1.1165 astatine 1:30 p.m. London time, down astir 0.1%.

Official information showed that a provisional estimate of France's Consumer Price Index (CPI) came successful astatine 1.2% successful September, down from 1.8% successful August.

Altogether, Insee said that nan September driblet successful user prices represents nan sharpest monthly autumn since 1990.

Insee said that nan crisp driblet successful ostentation reflects a marked autumn successful power prices, peculiarly those of petroleum products, arsenic good arsenic nan seasonal effect of nan autumn successful carrier costs and nan return to normal of definite tariffs successful nan aftermath of nan Olympic and Paralympic Games.

Tobacco prices were expected to beryllium virtually unchanged successful September, compared to nan erstwhile month, Insee said.

Separately, Spain's harmonized ostentation complaint fell to 1.7% successful September, down from 2.4% successful August, according to preliminary data published Friday by Spain's National Statistics Institute (INE).

The reference was somewhat little than nan 1.9% forecast by analysts polled by Reuters. Like France, Spain's harmonized ostentation complaint came successful little than nan ECB's 2% target.

Spain's preliminary CPI estimate, meanwhile, came successful astatine 1.5% successful September, down from 2.3% successful August.

The crisp driblet successful France and Spain's September ostentation information has fueled expectations that nan header complaint of nan euro area arsenic a full will bespeak a steep driblet to beneath nan ECB's 2% target.

Statistics agency Eurostat is scheduled to people flash euro area ostentation information for September connected Tuesday. Euro area ostentation dropped to a three-year debased of 2.2% successful August.

"Slightly little halfway ostentation successful nan euro-zone wouldn't travel arsenic a large astonishment to nan ECB truthful would beryllium improbable to drastically change policymakers' thinking," Franziska Palmas, elder Europe economist astatine Capital Economics, said successful a investigation note.

"So for now we deliberation that, connected balance, nan Bank is astir apt to time off rates unchanged adjacent month. But pinch nan business surveys looking weak, nan likelihood of a trim person risen," Palmas said.