Annual inflation in the 12 countries sharing the euro dipped to 2.3% in August from 2.4% in July, the European Union's Eurostat data agency said today, confirming an earlier estimate. The rate was in line with forecasts.
Despite the decrease, the rate of price growth in the euro zone remains above the European Central Bank's preferred level of close to but less than 2%, mainly because of strong energy prices.
Eager to keep price pressures in check, the ECB has raised its benchmark 'refi' refinancing rate four times since December, each time by a quarter of a percentage point. It currently stands at 3% and ECB watchers are pencilling a further quarter-point move in October.
But although headline inflation is still too high for the ECB's liking, underlying inflation remains tame.
Core inflation, which excludes volatile items of energy, food, alcohol and tobacco prices, also slipped in August to an annual rate of 1.3% from 1.4% in July, Eurostat said.
That was slightly lower than economists' expectations for a rate of 1.4%. Meanwhile, in the 25-nation European Union as a whole, inflation also eased in August to 2.3% from 2.4%, Eurostat said.
