Inflation in the Europe fell to 1.8% in September, below the European Central Bank’s 2% annualized target.
Data from statistics agency Eurostat shows that inflation continues to decline at a brisk clip across the European Union.
September’s reading of 1.8% was down from 2.2% in the previous month of August and in line with the consensus expectations of economists.
Core inflation, which excludes volatile energy, food, alcohol and tobacco prices, came in at 2.7% in September, which was lower than the 2.8% that had been anticipated.
The September decline in inflation was led by France and Germany, Europe’s two biggest economies, which have seen growth slow in recent months.
The drop in inflation below the 2% annualized target is expected to clear the way for the European Central Bank to lower interest rates further at its next policy meeting on Oct. 17.
Futures traders are betting on a 25-basis point interest rate cut from the European Central Bank at the October meeting.
The European Central Bank has previously reduced interest rates twice this year, cutting them by 25-basis points in June and again in September.