The Eurozone inflation has reached another record high this August as it climbs to 9.1 percent from the previous month’s 8.9 percent, according to Eurostat, Europe’s statistics office.
This rate which is above the 9 percent expectation was largely driven by high energy prices, intensifying the possibility of a further interest rate hike by the European Central Bank.
Energy prices in the 19 countries that make up the Eurozone surged to 38.9 percent, down slightly from 39.6 percent in July. Food, alcohol, and tobacco were up 10.6% compared to 9.8% in July.
Non-energy industrial goods, such as clothing, household appliances, and cars spiked 5% while services were up by 3.8% year-on-year, 0.1 percentage points more than in July.
Core inflation, which excludes more volatile energy, food prices, alcohol, and tobacco, rose 4.3 percent in August, up from 4 percent in July.
What you should know
- The harmonized index of consumer prices shows German inflation reaching an almost 50-year high of 8.8 percent in August, strengthening the case for larger rate hikes by the European Central Bank (ECB).
- According to the Eurostat flash estimate, Spain also released slowing inflation figures for August, at 10.3 percent compared to 10.7 percent for July.
- French inflation rate moved in the opposite direction, declining to 6.5 percent this August from 6.8 percent in July. This rate shows a greater slowdown as economists polled by Reuters and Bloomberg anticipated a drop to 6.7 percent. This will dial down a little pressure on the European Central Bank as hawks call for more aggressive action.
- Estonia’s inflation rate of 25.2% this August is the highest in the eurozone, while Malta and Finland ahead of France have low inflation rates, at 7.1% and 7.6% respectively.
