Inflation in Europe falls below 2% and opens the way for faster rate cuts

abcnews.go.com:

Inflation in the 20 countries that use the euro fell to 1.8% in September, below the European Central Bank’s target of 2% for the first time in more than three years

FRANKFURT, Germany — Inflation in the 20 countries that use the euro fell to 1.8% in September, below the European Central Bank's target of 2% for the first time in more than three years as falling energy prices give consumers relief from a burst of inflation that at one point reached into double digits.

Tuesday's official figure coupled with an anemic growth outlook could pave the way for faster interest rate cuts from the ECB, which has already trimmed rates twice.

Inflation fell from 2.2% in August, according to European Union statistics agency Eurostat. The last time inflation hit the ECB's 2% goal was in June, 2021 when it was 1.9%.

Economists have started to consider the possibility of a rate cut at the bank's Oct. 17 meeting. A few weeks ago, the expectations were that the central bank would wait until December before lowering borrowing costs again for consumers and businesses.

The bank must juggle the need to make sure inflation is under control, which would mean waiting longer to lower rates, against concerns over slow economic growth, which would argue for swifter cuts.

Higher central bank interest rate benchmarks combat inflation by raising rates throughout the economy, making it more expensive to borrow and spend. That reduces demand for goods and pressure on prices. But that also slows economic activity.

The ECB, U.S. Federal Reserve and other central banks rapidly raised rates to combat a burst of inflation that broke out as the economy rebounded from the pandemic, straining supplies of parts and raw materials, and after Russia invaded