The eurozone’s inflation rate in August exceeded expectations and remained at the same level as July, suggesting that the European Central Bank (ECB) may move forward with an additional interest-rate hike in September.
Preliminary data from the European Union’s statistics agency Eurostat revealed that the euro area’s consumer price index rose by 5.3% in August compared to the previous year. This figure is higher than the 5.1% predicted by economists surveyed by The Wall Street Journal.
It is worth noting that this inflation rate matches the July figure, which followed a gradual decrease from a peak of 10.6% in October of the previous year, according to FactSet data.
The increase in inflation can be attributed, in part, to rising food prices. Although food prices were 9.8% higher in August compared to the same month in 2022, they slightly eased from the 10.8% recorded in July. Conversely, energy prices experienced further deflation, with a 3.3% decline on a year-over-year basis in August. However, this decline was less significant than the 6.1% drop observed in July.
Core inflation, an essential measure of underlying inflation that excludes more volatile factors such as energy, food, alcohol, and tobacco prices, decreased to 5.3% in August from 5.5% in July, in line with expectations.
Overall, these inflation figures indicate a potentially stronger push towards an interest-rate hike from the ECB. Stay updated on the latest developments in the eurozone’s monetary policy.