Eurozone on the cusp of price stability: inflation falls to 2.1% in October

According to a fresh Eurostat estimate, annual inflation in the euro area stood at 2.1 per cent in October 2025, down from 2.2 per cent in September. This is the lowest level since the middle of the 2021-2022 energy and food crisis, and a very encouraging sign for the European Central Bank (ECB), which is targeting an inflation target of 2%.

The decline in inflation is taking place against the backdrop of a prolonged fall in energy prices - in October they fell by 1.0% compared to the same month last year. This is the sixth month in a row when the energy component goes into negative territory. For comparison, in September the decline was 0.4%.

Nevertheless, services remain the main inflationary driver: their growth accelerated from 3.2% to 3.4% year-on-year. This indicates that the underlying inflationary pressure associated with domestic demand has not yet abated. The growth of prices for food, alcohol and tobacco also slowed down: from 3.0% in September to 2.5% in October.

Prices for non-food products (without energy) also show moderate dynamics: growth was only 0.6 per cent, compared to 0.8 per cent in the previous month.

At the opposite pole are the Baltic States, where rates remain higher: in Latvia, Lithuania and Estonia inflation exceeds 4 per cent, and in Slovakia - 3.8 per cent.

Inflation cleared of volatile components (energy, unprocessed products, alcohol and tobacco) stabilised at 2.4%, suggesting a slowdown in underlying inflationary momentum but not its complete disappearance.

The next full report with detailed data is expected on 19 November. But we can already say that the inflation crisis, which was fuelled after the pandemic and worsened in 2022 on the back of the war and energy shock, is gradually receding.