On Thursday, Eurostat, the statistical office of the European Union (EU), reported that annual inflation in the eurozone decreased slightly from 5.5 percent in July to 5.3 percent in August.
Food, alcohol and tobacco prices were the main drivers of inflation with 9.8 percent, down from 10.8 percent in July. Service prices advanced by 5.5 percent year-on-year in August, compared with 5.6 percent in July.
Non-energy industrial goods inflation was 4.8 percent in August, down from 5 percent in July. Energy prices fell by 3.3 percent year-on-year in August after a 6.1 percent drop in Jul.
Countries with the highest yearly inflation rates for August included Slovakia (9.6 percent), Croatia (8.5 percent) and Austria (7.6 percent).
My new map shows food inflation rate in July 2023 with Turkey����, Hungary���� & Serbia���� leading the pack. In the European Union alone, inflation was 12.46%! #food #inflation #economy #business #Europe pic.twitter.com/4jUFsxvoS1
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The lowest year-on-year inflation rates were recorded in Belgium and Spain (2.4 percent), Cyprus (3 percent)and Greece, the Netherlands and Finland (3.4 percent).
ING’s Global Head of Macro Carsten Brzeski said despite the drop, core inflation remains too high and wage growth up until now signals that even without excessive wage settlements core inflation could stay higher for longer.
At its July meeting, the European Central Bank (ECB) hiked interest rates by 25 basis points, with President Christine Lagarde stressing that both a pause and a rate hike were possible at the September meeting.
The minutes of the July meeting showed the bank was still more concerned about inflation not returning to target than about an economy falling into recession.
The ECB has raised its key interest rates by 425 basis points since July last year to bring down inflation, which is hovering well above its target of 2 percent.
