In addition, downside risks relate to renewed increases in oil and other commodity prices, and protectionist pressures, as well as the possibility of a disorderly correction of global imbalances. With regard to price developments, euro area annual HICP inflation was 1.8% in September, according to Eurostat’s flash estimate, compared with 1.6% in August.
The increase in inflation was anticipated and reflects base effects mainly stemming from the energy component. In the next few months HICP inflation rates will hover around current levels  BIS Review 130/2010  1  before moderating again in the course of next year. Overall, in 2011 inflation rates should remain moderate, benefiting from low domestic price pressures.