Euro zone producer price rise at four-year peak as energy jumps

BRUSSELS (Reuters) - Euro zone industrial prices rose by their highest amount in more than four years in October as energy prices increased during the month, a positive sign for the European Central Bank in its fight against ultra-low inflation.

The European Union's statistics office said on Friday that prices at factory gates in the 19 countries sharing the euro increased by 0.8 percent in monthly terms in October and decreased by 0.4 percent from a year earlier.

Both figures were above market forecasts. Economists polled by Reuters had produced an average forecast of a 0.2 percent monthly rise and a 1.0 percent year-on-year decline.

In September, producer prices were up 0.1 percent in the month and down 1.5 percent from the previous year.

The surge in producers prices on a monthly basis is the largest increase since August 2012. Energy prices, up 2.6 percent, were the strongest component. Prices for all but one set of goods rose.

The year-on-year decline was also the smallest since July 2013, with the energy price decline limited to 1.5 percent.

Producer prices are an indication of consumer price trends, because unless cushioned by intermediaries and retailers, their changes translate directly into the final prices of goods and services for consumers.

The ECB wants to keep consumer price inflation below, but close to 2 percent over a two-year horizon - it was at a 31-month high of 0.6 percent in November. It has been printing money to buy euro zone government bonds to inject more cash into the economy and accelerate price growth.

In monthly terms, prices of non-durable consumer goods, such as clothing, were 0.3 percent higher, and durable goods and intermediate goods both up 0.1 percent.

Prices of capital goods, like machinery, were unchanged.

(Reporting By Philip Blenkinsop)