Euro Area: Inflation came in close to 10-year high in August

Euro Area Inflation August 2021

Euro Area: Inflation came in close to 10-year high in August

Harmonized inflation came in at 3.0% in July, above July’s 2.2% and marking the highest print since November 2011. Inflation therefore moved further above the European Central Bank’s target rate of 2.0%. August’s result was due to sharper increases in prices for energy, food, alcohol and tobacco, services and non-energy industrial goods.

On a monthly basis, harmonized prices rose 0.4% in August, contrasting July’s 0.1% decrease. Core inflation, which excludes volatile energy and unprocessed foods prices, jumped to 1.6% in August from July’s 0.9%, the highest print since March 2013.

Commenting on the short-term outlook for inflation, Bert Colijn, senior economist at ING, stated:

“The one big question mark is around the passthrough of the higher input and transport prices for goods, which has been moderate so far but the price pressures have become abnormal in recent months. The other is whether service sector reopenings will still cause price jumps like we saw for hairdressers after the first wave. We’re starting to see some evidence of that in restaurants and hotels, but not yet in package holidays. There is some evidence that this effect will start to become more prominent towards the end of the year, so hold tight: inflation has the potential to go higher from here.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest X Download Fullscreen