Euro zone consumer inflation in August was slightly lower than initially estimated, the European Union’s statistics office Eurostat said today.
But it still remained more than twice the European Central Bank’s target of 2%.
Eurostat said inflation in the 20 countries sharing the euro was 0.5% month-on-month in August and 5.2% year-on-year, lower than the flash estimate of 5.3% year-on-year reported on August 31.
Eurostat said core inflation, which excludes volatile prices of energy and unprocessed food, was 0.3% month-on-month in August and 6.2% year-on-year, in line with initial estimates.
An even narrower measure of inflation, which also excludes alcohol and tobacco and is watched by many economists, was 0.3% on the month and 5.3% year-on-year, also in line with the August 31 estimates.
Eurostat said more expensive services had the biggest impact on the year-on-year reading in August, adding 2.41 percentage points to the final number.
Food, alcohol and tobacco added another 1.98 percentage points and industrial goods 1.19 points. A fall in the prices of energy subtracted 0.34 points.
To bring inflation down to its target, the ECB raised its deposit rate to a record high 4% last week and hinted at a pause, raising expectations in the market that its next move will be a cut, possibly as soon as late spring 2024.
Slovak ECB policymaker Peter Kazimir said yesterday that the rate hike last week may have been its last for now, but policymakers will need until March to be sure, with further rate hikes not yet ruled out.