Eurozone Inflation Steady At 0.2%
August 31 2015 - 3:42AM
RTTF2
Eurozone inflation remained unchanged at a very low level in
August as further fall in oil prices curbed its ability to move
upward.
Inflation came in at 0.2 percent in August, the same rate as
seen in July and June, preliminary data from Eurostat showed
Monday. It was forecast to ease to 0.1 percent.
Inflation remains well below the European Central Bank's target
of 'below, but close to, 2 percent over the medium term'.
Excluding energy, food, alcohol and tobacco, core inflation
remained stable at 1 percent in August, while it was expected to
ease marginally to 0.9 percent from a 15-month high.
Stable inflation in August eases pressure on the ECB to consider
increasing its stimulative efforts at its September policy meeting
on Thursday, such as by front-loading more its quantitative easing
program, IHS Global Insight Economist Howard Archer said.
He expects policymakers to sit tight despite the current
increased concern that events in China could have an impact on
Eurozone growth.
ECB policymaker Peter Praet last week said downside risks to
inflation have increased and the bank is willing to expand its bond
purchase program, if needed. The current QE program of buying EUR
60 billion bonds a month will run until September 2016.
The ECB will release its latest inflation and growth outlook
after the Governing Council meeting on September 3.
Among components of consumer prices, prices of food, alcohol and
tobacco rose 1.2 percent annually after increasing 0.9 percent.
Likewise, non-energy industrial goods price inflation improved to
0.6 percent from 0.4 percent.
Cost of services climbed 1.2 percent, same as in June.
Meanwhile, energy prices plunged 7.1 percent, faster than the 5.6
percent fall a month ago. Full data for August is scheduled for
release on September 16.
In Germany, EU harmonized inflation held steady at 0.1 percent
in August. On the other hand, Italy's inflation rose to 0.5 percent
from 0.3 percent.
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