Euro area inflation climbs above 3% in August on higher energy prices
- Eurozone August preliminary CPI +3.3% vs +3.3% y/y expected
- Prior +2.9%
- Eurozone August preliminary core CPI +2.4% vs +2.5% y/y expected
- Prior +2.5%
No surprises there as headline annual inflation jumps back up above the 3% mark again - the first time since May. This is largely led by a surge in energy price inflation, which clocked in at 14.3% in August. That is seen way up from 10.3% in July.
Even on the monthly estimate, energy prices were seen shooting up by 2.9%. That is what is pushing up monthly headline inflation by 0.4% in August. Besides that, services inflation was up 0.1% on the month while food price inflation was flat.
The only surprise in this report was that core annual inflation was seen easing just a little bit more to 2.4%. That matches the lowest estimate since June but is still a little higher compared to when we first got to the US-Iran conflict. The drop mostly stems from a decline in services inflation, which fell to 3.0% from 3.3% previously. Meanwhile, food price inflation was seen keeping steady at 1.2% - the same as it was in July.
All in all, the report does reaffirm that the ECB will have to very well position itself in the battle against inflation that is to come. That as there might be potential risks of second-round effects coming into play. It means that a September rate hike will be warranted but policymakers don't have to be too hasty in chasing the next one just yet.
This article was written by Justin Low at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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