Inflation in the Eurozone continues to rise, despite a series of measures by the continent’s governments in an attempt to lower prices. According to a preliminary estimate published today (Wednesday) by the Central Bureau of Statistics of the Union, the consumer price index in the month of August in the Eurozone stood at 9.1%, compared to 8.9% in July. The calculation is an annual comparison (for August 2021). Inflation exceeded the forecasts of economists, who expected an increase to 9.0%.
As was the case in previous months, the energy sector is responsible for a large part of the increase, with a 38.3% jump this August compared to last year. The food sector recorded a sharper price increase than last month, with an increase of 10.6% compared to 9.8% in July. Many food producers have warned in recent months that they have not yet “passed on” to consumers the price increases they themselves are suffering. The services sector also registered an increase of 3.8%. Eurozone core inflation, which ignores changes in energy and food prices, also rose to 4.3%, compared to 4% last month. The inflation target in the Eurozone is about 2%.
The dismal inflation data reinforce calls for the European Central Bank (ECB) to act with greater monetary firmness, and to raise interest rates by 0.75% at its upcoming meeting next weekend. So far, the central bank has debated whether to agree to a 0.5% increase, because the European Union is on the way to a recession and the tightening of financial conditions could make it worse. In recent weeks, the euro has been on par with the dollar, and even below it. The interest rate on bank deposits in the Eurozone is 0%, compared to more than 2% in the US, for example.
The data published by the Aerostat agency differ slightly from the national price indices, and they undergo consolidation and adjustment. According to the data, this harmonized inflation (HICP) reached 8.8% in Germany (compared to 8.5% in July), 9% in Italy (compared to 8.4% in July) and 13.6% in the Netherlands (compared to 11.6% in July). A decrease in inflation was recorded in several countries, including Spain which recorded inflation of 10.3% (compared to 10.7% in July) and France which recorded inflation of 6.5% (compared to 6.8% in July).