The Eurozone’s annual inflation remained unchanged at 0.2%

31.08.2016

The inflation in the Eurozone was stable in August, contrary to the expectations of small growth - food prices, industrial goods and services rose less than in July, increasing the pressure on the ECB.

Inflation in the 19 countries of the Eurozone was 0.2 %, as in July, said the statistics of Eurostat agency after the first evaluation.

The decline in energy prices was not as great as a month earlier, but the cost of food, industrial goods and services has grown less.

The rate of inflation was below expectations of 50 economists polled by Reuters, who on average were expecting a rise in prices by 0.3 %.

Core inflation, which does not include the most volatile components of food and energy, also unchanged at 0.8 % and was again below market expectations of 0.1 % points.

Inflation rates are far from the ECB target of 2 % and the failure of the regulator in an attempt to disperse them is a bad sign for the central bank that seeks to avoid a deflationary spiral.

Every month, the ECB buys the assets of EUR 80 billion ($ 89.2 billion) by pumping money into the economy. Interest rates have been lowered to negative values, and the banks were offered interest-free loans.

The meeting of the ECB Governing Council will be organized next week. However, most investors do not expect new steps before the fourth quarter.

In Germany, the August consumer prices, calculated according to national standards, increased by 0.4% compared to the same month of 2015, according to preliminary data of the Federal Statistical control of the country (Destatis). In July, inflation in Germany was also 0.4% in annual terms.

Food in Germany rose this month by 0.9% in annual terms, the services became more expensive by 1.3%, household energy prices dropped by 5.9%.

Consumer prices in Germany, calculated by the standards of the European Union, increased last month by 0.3% per year. Prices in relation to the previous month fell 0.1%.

Analysts on average expected an increase by 0.5% in annual terms, and by 0.1% m/m.

In France, the consumer prices for August 2016, calculated according to French standards, increased by 0.2% in annual terms after the same change in July and June, according to preliminary data of Insee.

 

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