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In
its first official estimate, European Union statistics office
Eurostat said euro zone prices rose 0.2 percent year-on-year
this month, the same as in July and more than the 0.1 percent
forecast in a Reuters poll.
"Stable euro zone consumer price inflation in August eases
pressure on the European Central Bank to consider increasing its
stimulative efforts at its September policy meeting on Thursday,
such as by front-loading more its QE program," IHS Global
Insight economist Howard Archer said.
He expected no action from the ECB despite fears about China's
economy that could affect growth prospects in Europe but said
ECB President Mario Draghi might stress that the ECB is ready to
act if inflation dips further or fails to pick up.
Cheaper energy was the biggest factor lowering the overall
index, with energy prices 7.1 percent lower than in August 2014.
Oil prices have fallen from above $60 a barrel in early July to
around $43 last week and economists said the effects of that
fall may not be fully visible yet.
"It may be that the latest plunge in commodity and energy prices
is not yet fully reflected in inflation data," said Carsten
Brzeski, economist at ING.
Unprocessed food had the biggest upward impact on inflation,
with prices rising rose 2.3 percent in annual terms.
Excluding both volatile energy and unprocessed food prices -- a
measure the ECB calls core inflation -- consumer prices rose 0.9
percent year-on-year, the same as in July.
"Given the rapid change in the global economic climate, we do
not think this figure will affect ECB policy," said Dominique
Barbet, economist at BNP Paribas.
"On the contrary, that will help the central bank to buy time in
this week's council meeting.
"The ECB needs to wait for dust to settle in order to better
read the impact of recent financial market volatility onto the
euro zone economy," he said.
(Additional reporting by Francesco Guarascio; Editing by
Catherine Evans)
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