Cyclical|Inflation is very close to the central bank’s two percent target.
Consumer prices inflation slowed to 2.2 percent in the euro area in August, according to the preliminary data published by Eurostat, the statistical authority of the European Union, on Wednesday. The last time inflation was as slow was in July 2021.
The noticeable slowdown in inflation means that it is very close to the central bank’s two percent target. Therefore, it is increasingly likely that the European Central Bank will cut its key interest rates by 0.25 percentage points in two weeks.
Energy became cheaper in August by 3.0 percent from the same time last year. Unprocessed foodstuffs became more expensive by 1.1 percent, industrial products by 0.4 percent and services by 4.2 percent.
Core inflation, closely monitored by economists and central banks, eased to 2.8 percent in August.
Core inflation is an important measure because the direct impact of sensitively changing energy and food on consumer prices has been removed from it. Therefore, it gives a better indication of the broad scope of inflation.
The prices of services rose by 4.2 percent in August, which is mainly due to large wage increases.
The fastest inflation was in August in Belgium, Estonia and the Netherlands. In Belgium, consumer prices rose by 4.5 percent from August last year, in Estonia by 3.4 percent and in the Netherlands by 3.3 percent.
The slowest inflation was in Lithuania, Latvia and Finland. In Lithuania, consumer prices rose by 0.7 percent, in Latvia by 0.9 percent and in Finland by 1.1 percent. Also in Slovenia and Ireland, the inflation rate was 1.1 percent in August.
The news is updated.
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