The annual inflation was still double the European Central Bank’s target, however.

The Eurozone's annual inflation rate slowed down to 4.3% year-on-year in September, Eurostat announced on Friday.

This figure is the lowest level since October 2021 and should bring slight relief to the millions of households still grappling with high prices.

The annual rate shows a spectacular drop from 5.2% in August.

Core inflation, which excludes volatile fuel and food prices, fell more than analysts expected — to 4.5% from 5.3%.

Energy prices dropped 4.7% in September, while food price inflation remained uncomfortably high at 8.8%.

The ECB recently revised its inflation forecasts upward for both 2023 to 5.6% and 2024 to 3.2%, primarily driven by an increased trajectory in energy prices.

For 2025, the central bank anticipates inflation to average 2.1%.

Slowing inflation is strengthening hopes that the European Central Bank won’t have to further restrict the economy by raising interest rates from already-record highs.

The fall in core inflation “reinforces our view that the ECB has finished raising interest rates,” said Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics.

The Eurozone's biggest economies show mixed signs

Readings across the major economies that use the euro currency were a mixed bag.