November 5, 2019 / 7:45 PM / a month ago

Euro zone September producer prices post minimal rise

FILE PHOTO: Unfinished pliers still glow after being hot-formed by a hammer at the factory of Knipex, a 130 year-old family-owned pliers and tools maker company in Wuppertal, western Germany, October 25, 2016. REUTERS/Wolfgang Rattay

BRUSSELS (Reuters) - Euro zone industry prices edged up slightly in September after a larger fall in the previous month, official estimates showed on Tuesday, as the bloc continues to struggle with low inflation.

The European Union statistics agency Eurostat said prices at factory gates in the 19 countries sharing the euro rose by 0.1% in September on the month, in line with the Reuters consensus, and after a 0.5% fall in August.

On the year, prices dropped by 1.2%, also in line with market expectations.

Industrial producer prices signal inflationary pressure early in the pipeline because unless their change is absorbed by intermediaries and retailers, it is transmitted to the final consumer, impacting consumer inflation.

The European Central Bank wants to keep consumer inflation below, but close to 2 percent over the medium term, but has struggled to accelerate price growth for years despite programs of government bond buying on the market.

A preliminary estimate for October, released last week, shows the euro zone’s headline inflation is slowing to 0.7% on the year from 0.8% in September.

The ECB decided in September to re-launch bond purchases as inflation remained to slow.

The monthly increase of producer prices was mostly due to a 0.5% rise in energy costs at factories. Excluding energy, industry prices were flat.

Reporting by Francesco Guarascio @fraguarascio

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