Euro Area: Annual prices fall at sharpest pace in over five years in August
Harmonized consumer prices fell 0.2% compared to the same period of the previous year in August, swinging from July’s 0.4% increase. Inflation thus moved further away from the European Central Bank’s target rate of near, but under, 2.0%. August’s drop was due to a fall in prices for non-energy industrial goods—largely due to a change in the start of the sales season in several large eurozone economies—as well as to softer increases in prices for services and for food, alcohol and tobacco. On the other hand, prices for energy declined at a slower clip than in July.
On a monthly basis, harmonized prices fell 0.42% in August, following July’s 0.35% decrease. Core inflation, which excludes volatile energy and unprocessed foods prices, fell to 0.6% from July’s 1.3%.