Eurozone Producer Prices Fall

Production prices declined by 0.8%

Producer prices in the 15-nation eurozone fell at a record rate in October, in line with cheaper energy prices, the Eurostat statistics body said on Dec. 1, opening the way for a new interest rate cut by the European Central Bank.

Production prices declined by 0.8% in October from September, the strongest monthly fall since the index was created in 1990.

Compared with October 2007 prices rose 6.3% after an annual gain of 7.9% in September.

For the 27-member European Union wholesale prices were down 1.4% in October from September and up 7.3% for the year.

The October slide was attributed to a recent weakening in crude oil prices. Eurozone energy prices at the wholesale level fell 2% in October compared with September but were 15.8% higher than in October 2007.

In a climate of recession and in the face of deflationary risks, the ECB is widely expected to lower its principal interest rates at a meeting on Dec. 4.

Copyright Agence France-Presse, 2008

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