Inflation drops to a two-year low in Europe. It offers hope, but higher oil prices loom

By DAVID McHUGH
AP Business Writer

FRANKFURT, Germany (AP) — Inflation has dropped sharply in Europe. The European Union’s statistics agency said Friday that the annual rate was 4.3% in September for the 20 countries that use the euro, down from 5.2% in August. That raises hopes consumers will get relief from costlier groceries, vacations and haircuts and that the European Central Bank could avoid raising interest rates again. But economists say some of the dip is a statistical quirk. And if oil prices rise any further, a hoped-for decline in inflation will slow. High prices have been holding back the European economy because people’s paychecks don’t go as far as they used to in covering their bills, forcing them to avoid other spending.