In September 2025, the EU Industrial Producer Price Index (PPI) declined by 0.2% year-on-year and 0.2% month-on-month, marking two consecutive months of negative growth. This trend reflects ongoing easing of inflationary pressures in European industry, particularly driven by falling energy prices, which have significantly reduced overall cost pressures. Data show that PPI year-on-year growth has steadily slowed from 0.6% in April to -0.2% in September over the past six months, indicating emerging deflationary risks. On a breakdown basis, energy goods prices fell 2.2% year-on-year—the main drag on overall PPI. Although intermediate goods declined slightly by 0.3%, capital goods and consumer goods sectors remained positive. Capital goods rose 0.8% year-on-year, while durable and non-durable consumer goods increased by 1.6% and 1.2%, respectively, signaling resilience in manufacturing investment and final demand. The significant drop in energy prices was largely influenced by international oil price volatility and adjustments to the EU carbon market policy, providing short-term relief to industrial costs. Overall, EU industrial inflation is trending milder, with declining energy prices serving as a key driver. While some downstream products continue to see positive price transmission, pressure on the production side has eased, leaving room for potential further monetary easing. Analysts warn that if energy prices remain low, PPI may face continued downward pressure in coming months, underscoring the need to monitor the risk of deflationary expectations undermining economic recovery.