From Morningstar: 2024-08-30 07:51:00

The eurozone’s Consumer Price Index rose 2.2% in August, down from 2.6% in July as per Eurostat’s flash estimate. Core inflation dropped to 2.8%. Analysts saw this as a positive change, bringing inflation closer to ECB’s target level of 2%. Service inflation contributed the most to the overall increase, followed by food and non-energy industrial goods.

In most eurozone economies, prices fell in August. Germany and France saw lower year-on-year inflation rates, with France influenced by one-off pricing effects related to the Paris Olympics. Spain and Italy also reported lower inflation rates than expected, mainly due to energy prices. Overall, there was a downward trend in consumer prices across the eurozone.

The ECB is expected to cut interest rates at the upcoming September meeting, aiming for a quarter-point reduction in the benchmark rate. Analysts believe that with inflation stabilizing and unemployment steady, this rate cut is justified. The ECB’s decision will precede the Federal Reserve’s meeting, highlighting the differences in economic conditions between the Eurozone and the US.

Analysts predict that the ECB will announce another rate cut in the near future. The ECB’s hawkish stance has had the desired effect, with inflation nearing the target level. However, concerns about services inflation and wage data persist. The ECB’s upcoming decision will also depend on additional economic data and global market conditions.



Read more at Morningstar: Eurozone Inflation Fall Sets Up ECB Rate Cut