Euro zone inflation falls to 1.8% in September, below the European Central Bank's 2% target

Euro zone inflation fell to 1.8% in September, coming in below the European Central Bank's 2% target, flash data from statistics agency Eurostat showed Tuesday.

The reading was in line with the expectations of economists polled by Reuters, after annual inflation hit a three-year-low of 2.2% in August.

The core inflation rate, which excludes more volatile energy, food, alcohol and tobacco prices, came in at 2.7%. It was forecast to remain unchanged from the August reading of 2.8%.

Services inflation in the euro zone eased to 4% in September, down from 4.1% in August, the data showed.

The figures come after September inflation eased below the 2% European Central Bank target in several key euro zone economies, including France and Germany. The harmonized inflation rate in Europe's leading economy dropped by more than expected to 1.8% on an annual basis, preliminary data showed Monday.

While there could be a "temporary rebound" of inflation in the coming months, the headline reading is likely to remain below 2% in the coming year, Franziska Palmas, senior Europe economist at Capital Economics, said in a note on Tuesday.

Bert Colijn, chief economist for the Netherlands at ING, meanwhile noted that a renewed pickup of inflation is also not entirely certain.

"While a bounce back in the fourth quarter has been expected, the question is to what extent this can materialise as petrol prices have been dropping quickly on the back of falling oil prices," he said in a note on Tuesday.

European Central Bank President Christine Lagarde on Monday said that policymakers were becoming more confident about inflation returning to the 2% target.

"Looking ahead, inflation might temporarily increase in the fourth quarter of this year as previous sharp