Eurozone inflation fell to 2.2 per cent in August, its lowest level in almost three years. This drop may give the European Central Bank (ECB) room to cut interest rates further in September. In July, inflation was still at 2.6 per cent. The fall was mainly due to lower energy prices, while the cost of food, alcohol and tobacco rose.
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Within Europe, inflation was highest in Belgium (4.5 percent) and lowest in Lithuania (0.7 percent). The ECB aims for an inflation rate of 2 percent and with the current decline, that target is in sight. Nevertheless, the ECB remains cautious, as inflation is expected to rebound partly due to wage increases in the coming months. Moreover, inflation is expected to remain above 2 per cent until 2025, making the ECB reluctant to cut interest rates soon.
View the numbers per country here:
Table: Eurostat.
More information:
Eurostat
www.ec.europa.eu