Inflation in advanced economies hits 1.9%

AFP, Tuesday 30 Nov 2010

Advanced economies face continued rise in inflation

Inflation in advanced economies rose to 1.9 percent in October from 1.7 percent in September, the OECD said on Tuesday, noting strong rises in Japan and Canada.

Inflation in the United States climbed to 1.2 percent from 1.1 percent in the 12 months to September. The figure for Japan was 0.2 percent, a turnaround from minus 0.6 percent in September.

In Japan, inflation over 12 months was positive for the first time for 20 months, and in Canada prices rose at the fastest rate since October 2008.

In the 16-country eurozone, prices showed a rise of 1.9 percent in October compared to the level in October last year, up from 1.8 percent in September.

This was exactly in line with eurozone inflation data for November, published by the European Union's statistics agency Eurostat on Tuesday. The data from the Organisation for Economic Cooperation and Development covered 30 of its 33 members.

During the economic crisis there had been concern that slowdown and lack of confidence could turn a tendency for prices to fall into a vicious cycle of falling demand, employment and prices, amounting to deflation which can become entrenched and highly damaging.

The main drivers of the price rises in October were rises in the prices of energy and food. "Energy prices rose by 6.6 percent in October compared with 5.2 percent growth seen in September, while food prices were up 2.6 percent, versus 2.3 percent the previous month," the OECD said.

If energy and food prices were stripped out of the data, prices rose by 1.1 percent in the 12 months to October, from 1.2 percent in September.
In Britain inflation was 3.2 percent after 3.1 percent in September, in Canada 2.4 percent from 1.9 percent, Italy 1.7 percent from 1.6 percent, and it was steady in France at 1.6 percent and in Germany at 1.3 percent.

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