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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 Aug 31.
The ECB wants to keep inflation at 2.0% in the medium term.
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 Aug 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 on Monday that the
rate hike on Thursday may have been its last for now, but
policymakers will need until March to be sure, with further rate
hikes not yet ruled out.
(Reporting by Jan Strupczewski; editing by Philip Blenkinsop)
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