Euro zone inflation confirmed at low of 1pc in August

Euro zone inflation was stable in August at its lowest level in nearly three years, the European Union’s statistics agency said on Wednesday, confirming its earlier estimates.

Eurostat said inflation in the 19 countries sharing the euro was at 1 percent on the year in August, unchanged from the July reading and in line with expectations in a Reuters poll.

On the month, inflation went up 0.1 percent, below market expectations of a 0.2 percent rise, new monthly data released by Eurostat showed.

The rates of yearly price increases in July and August are the lowest since November 2016, well below the ECB’s inflation target of below but close to 2 percent despite years of unprecedented monetary stimulus through rate cuts and trillions of euros of bond purchases.

Core inflation, which strips out volatile unprocessed food and energy and which the ECB scrutinises in policy decisions, was also confirmed at 1.1 percent in August on the year, the same rate recorded in July.

The narrower measure also excluding alcohol and tobacco prices, at which many market economists look, was unchanged at 0.9 percent.

Last week, European Central Bank chief Mario Draghi pledged indefinite monetary stimulus to revive an ailing euro zone economy and push up inflation.