European Inflation Rises in August
The flash estimate for eurozone inflation in September is 2.7%, up from 2.6% in August, according to Eurostat, the European Union’s statistical agency. Economists polled by Bloomberg had expected a decrease to 2.4%. The eurozone’s stated inflation target is “2%…
The eurozone’s stated inflation target is “2% or less,” but that number has been out of reach for many months now. The eurozone’s all-items index reached 3% in September 2011 and has been 2.4% or higher since April.
Energy costs rose 9.2% in September, the single largest contributor to the inflation index. The food, alcohol and tobacco index rose 2.9%. As bad as the energy rise is, however, it is lower than the 12.4% hike in September 2011.
Bloomberg points out that a September increase in Spain’s value-added tax pushed that country’s inflation rate to 3.5%, and the Italy, too, had a sharp increase in inflation.
The rise in inflation suggests that a downward move in the European Central Bank’s policy rate will not be forthcoming. The ECB has lowered its GDP growth target for 2013 to just 0.5%. It raised its inflation estimate from 1.6% to 1.9%, while expecting inflation to remain above 2% throughout the rest of this year.
Paul Ausick
Contact [email protected] for any questions or corrections.
Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
