He Year-on-year Harmonized Index of Consumer Prices (IPCA) for the Eurozone rose 5.3% in August, at the same rate as in July, as shown on Thursday by the official data published by Eurostat. The IPCA exceeded expectations of growth of 5.1%.
inflation of Core HICP fell to 5.3% year-on-year in August, from 5.5% in July. Markets had expected a figure of 5.3%.
In monthly terms, the IPCA of the Old Continent jumped 0.6% in August, compared to the fall of 0.1% in July and the -0.1% expected. Core IPCA inflation picked up 0.3% in the period under review, compared to the 0.3% expected and the -0.1% registered in July.
It is worth mentioning that the inflation target of the European Central Bank (ECB) is 2.0%.
The bloc’s IPCA figures significantly influence the market’s assessment of the ECB’s interest rate prospects. At the moment, the markets value at 40% the probability that the ECB raises interest rates by 25 basis points, to 4%, in September.
Key data (via Eurostat)
“As for the main components of inflation in the euro zone, food, alcohol and tobacco are expected to register the highest annual rate in August (9.8%, compared to 10.8% in July), followed by services (5.5%, vs. 5.6% in July), non-energy industrial goods (4.8%, vs. 5.0% in July) and energy (-3.3%, vs. -6.1% in July).”
Source: Fx Street
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