Euro zone inflation confirmed at six-year high in October

A gas station of Dutch global energy company Shell and a station of French global energy company Total are seen in Schengen, Luxembourg January 27, 2016.REUTERS/Wolfgang Rattay

BRUSSELS (Reuters) - Euro zone inflation rose in October at its fastest pace in nearly six years, driven by energy prices, the European Union statistics agency said on Friday, confirming its earlier estimate.

The core inflation measure which excludes energy and food was revised down.

Eurostat said that consumer prices in the 19 countries sharing the euro rose 2.2 percent year-on-year in October after a 2.1 percent increase in September and a 2.0 percent gain in August. It was the biggest increase since December 2012.

The headline figure supports the European Central Bank’s decision to end its price-boosting bond-buying programme at year-end, as inflation is now overshooting the ECB target of price growth below, but close to, 2 percent over the medium term.

In less positive news for the ECB, inflation excluding the volatile components of energy and unprocessed food -- the core indicator that the central bank watches in its policy decisions -- was revised down by Eurostat to 1.2 percent on the year, from a previous estimate of 1.3 percent. It was however still growing faster than the 1.1 percent increase posted in September.

On the month, headline inflation went up by 0.2 percent in October, in line with market expectations, but slowing from 0.5 percent in September.

The narrower core indicator, watched by many market participants, which excludes energy, food, tobacco and alcohol, was confirmed at 1.1 percent on the year.

The rise in headline inflation was mostly driven by energy prices which jumped 10.7 percent year-on-year in October, while prices for other industrial goods went up by only 0.4 percent.

Inflation in the services sector, the largest in the euro zone economy, was 1.5 percent on the year, but prices dropped by 0.3 percent on the month.

Reporting by Francesco Guarascio; Editing by Alastair Macdonald