Inflation Slows to Lowest Rate in Three Years as Services Drive Prices Up
Brussels, September 18 – Eurozone inflation slowed significantly in August, bringing the rate closer to the European Central Bank’s (ECB) target of 2%. According to final data from Eurostat, annual inflation in the eurozone fell to 2.2%, down from 2.6% in July and far below the 5.2% recorded in August last year.
This marks the slowest inflation growth in three years and follows a recent ECB interest rate cut aimed at stabilizing the economy. Across the broader European Union, inflation also dropped, with prices rising by 2.4% year-on-year in August, down from 2.8% in July. Last August, the rate stood at 5.9%.
Inflation Trends Across the Eurozone
Inflation rates varied significantly across eurozone countries. The smallest price increases were seen in Lithuania (0.8%), Latvia (0.9%), and Ireland, Slovenia, and Finland (all at 1.1%). Romania (5.3%) and Belgium (4.3%) experienced the highest inflation rates.
Services were the primary driver of inflation, with prices in the sector rising by 1.8% in August. Food, alcohol, and tobacco prices also contributed to the increase, with a 0.46% rise. However, energy prices fell by 0.29%, helping to moderate overall inflation growth.
Core Inflation Shows Improvement
Core inflation, which excludes volatile items such as food and energy, dropped to 2.8%, down from 5.3% in the same period last year. This decline suggests inflation is moving steadily towards the ECB’s 2% target, a key milestone for the eurozone’s economic stability.
The ECB’s recent interest rate cut, combined with slowing inflation, points to potential easing of pressure on households and businesses across Europe, although challenges remain as individual countries continue to experience varied inflation rates.
