The euro area inflation rate stood at 2.2% year-on-year in August, four-tenths lower than the 2.6% increase in July and the lowest since July 2021, according to the provisional estimate of data published by the Community Statistical Office, Eurostat.
This data is added to that of the German CPI, which fell to 1.9% in August, the lowest since 2021, or to the sharp drop of six tenths in Spain, to 2.2%, its lowest figure since June 2023, compared to the 2% target of the European Central Bank (ECB), which encourages the idea that the inflationary crisis that led to the invasion of Ukraine is coming to an end and opens the door to a possible new cut in interest rates by part of the monetary institution at the meeting of September 12.
In June, the agency had already reduced the price of silver by 25 basis points, to 4.25%. The US Federal Reserve also announced a week ago that the time had come to cut rates, which have remained at 5.5% since July 2023.
The slowdown in price growth in the eurozone reflected a 3% drop in the cost of energy, after rising 1.2% year-on-year in July, while fresh produce rose 1.1% year-on-year, a tenth more than the previous month.
Similarly, non-industrial energy goods rose 0.4% in August, three-tenths less than the increase in July, while services rose 4.2% annually, two-tenths more than the increase observed in July.
Excluding the impact of energy on prices, the inflation rate would remain at 2.7% in August, while also excluding the cost of food, as well as tobacco and alcohol, the underlying rate would be moderate at 2.8% compared to 2.9%.
Among the eurozone countries, the highest increase in the cost of living in August was in Belgium, with 4.5%, ahead of Estonia, with 3.4% and the Netherlands, with 3.3%.
In contrast, the lowest price increases were observed in Lithuania, with 0.7%, and Latvia, with 0.9%, while in Slovenia, Finland and Ireland prices increased by 1.1%.
In the case of Spain, the one-year inflation rate in August rose (taking into account the European methodology) to 2.4% compared to 2.9% the previous month, which reduces the country’s unfavourable price gap with respect to the euro zone to two tenths.
