The annual rate of inflation in the euro zone fell to 1.8% in September from 2.3% in August, according to a preliminary estimate from the Eurostat statistics agency. Inflation in the euro zone is now at its lowest rate since March 2004.
The September figure was slightly lower than economists' forecasts of 1.9% and was also within the European Central Bank's target of below or close to 2%. The last time euro zone inflation dipped below 2% in January 2005.
This could ease the pressure on the ECB to raise interest rates in an attempt to combat inflation.
Separate figures from the European Commission showed that confidence in the euro zone's economic outlook rebounded in September, particularly in industry but also for the retail and construction sectors.
The commission's economic sentiment indicator (ESI) was measured at 111 for the EU as a whole, a rise of 1.6 points over the August index. For the euro zone, the economic sentiment indicator was also up over August, by one point to 109.3. Industrial confidence in the EU is now above the last peak reached in May 2000.
The commission also said that its euro area business climate indicator (BCI) was also up in September to 1.46 after two months of decline.
