In September, French inflation decreased more than anticipated due to a decline in energy prices and transportation costs.

• In September, the second-largest economy in the euro zone recorded harmonized consumer prices at 1.5%, a decrease from the previous month's 2.2%.
• The reading, which fell below the 2.0% expectations of economists surveyed by Reuters, is likely to increase pressure on European Central Bank policymakers to implement stimulus measures to boost the broader economy.
• In September, France's Consumer Price Index (CPI) was estimated to be 1.2%, lower than the previous month's 1.8%.

In September, the preliminary data from the National Institute of Statistics and Economic Studies (Insee) revealed that France's inflation rate dropped significantly.

In September, the Harmonized Index of Consumer Prices (HICP) in the euro zone's second-largest economy was 1.5%, a decrease from 2.2% in August. The HICP is adjusted for comparison with other euro zone countries.

The HICP reading, which fell below the 2.0% expectations of economists surveyed by Reuters, may increase pressure on ECB policymakers to implement measures to boost the broader economy.

Earlier this month, the ECB reduced interest rates by 25 basis points to 3.5%, continuing a cycle of rate cuts that began with a significant move in June.

The euro initially dropped on the news. It was last trading at $1.1161 at 11:20 a.m. London time, down approximately 0.13%.

In September, France's Consumer Price Index (CPI) was estimated to be 1.2%, lower than the previous month's 1.8%.

Since 1990, the sharpest monthly decline in consumer prices occurred in September, as stated by Insee.

The decline in inflation is attributed to a significant decrease in energy prices, particularly petroleum products, as well as the seasonal reduction in transport costs and the normalization of certain tariffs following the Olympic and Paralympic Games, according to Insee.

Insee predicted that tobacco prices would remain relatively stable in September compared to the previous month.

Odds of another ECB rate cut 'have risen'

In September, Spain's inflation rate decreased from 2.4% in August to 1.7%, as per preliminary data released by the National Statistics Institute (INE) on Friday.

The harmonized inflation rate in Spain was lower than the ECB's target of 2%, just like France's reading was slightly below the 1.9% forecast by analysts polled by Reuters.

In September, Spain's preliminary CPI estimate was 1.5%, lower than the 2.3% recorded in August.

The decline in September inflation data in France and Spain has increased the likelihood that the euro zone's overall inflation rate will fall below the ECB's 2% target.

Eurostat will release flash euro zone inflation data for September on Tuesday. In August, euro zone inflation reached a three-year low of 2.2%.

According to Franziska Palmas, senior Europe economist at Capital Economics, if core inflation in the euro-zone were to decrease slightly, the ECB wouldn't be taken aback and it wouldn't significantly change policymakers' thinking.

Palmas stated that although the Bank is currently leaning towards keeping rates unchanged next month, the weak business surveys have increased the likelihood of a rate cut.