Oil helps cut eurozone inflation

Despite the slowdown, analysts still expect rates to rise

A drop in oil prices helped to slow the pace of inflation in the 12-nation eurozone in October, official figures have shown.

Prices rose 0.1% during October, taking the annual inflation rate to 1.6%, just below September's figure of 1.7%.

However, the underlying rate excluding energy and unprocessed food costs, increased from 1.5% in September to 1.6% in October.

Analysts say an interest rate rise in December is still likely.

'Transitory'

"We expect to see European Central Bank rates rise in a progression in December, February and April to a target of 4% next year," said Bear Stearns Chief European economist David Brown.

"The ECB will dismiss these low numbers as transitory and due to the impact of lower oil prices," said Mr Brown.

The figures come soon after data revealed that eurozone economic growth slowed by more than expected in the three months to the end of September.

Growth during the third quarter fell to 0.5%, from 0.9% during the previous three months, with stagnation in France offsetting strong figures from Germany.