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Eurozone CPI accelerates to 3.3% as core inflation cools
Energy drove most of the headline jump, with energy inflation rising from 10.3% to 14.3% y/y, keeping the ECB split on whether to tighten further.
Eurozone inflation accelerated more than expected in August, but underlying price pressures eased, leaving the ECB debate over September policy direction unresolved, according to Action Forex.
Headline CPI climbed from 2.9% to 3.3% year over year, above the 3.2% consensus, and prices rose 0.4% month over month.
Core inflation excluding energy, food, alcohol and tobacco fell from 2.5% to 2.4% year over year, missing expectations for 2.5%, with services inflation slowing from 3.3% to 3.0% y/y.
Action Forex notes the composition of the CPI suggests against reading the 3.3% headline alone as broad based reacceleration, as energy inflation surged from 10.3% to 14.3% while other components such as food and non energy industrial goods were more mixed, complicating the ECB’s assessment of how persistent the shock will prove.