August's Eurozone inflation marks a lower-than-anticipated figure at 2%
The European Central Bank (ECB) has kept its key interest rates unchanged, with the deposit facility remaining at 2%, following a meeting in Frankfurt last week. The decision comes as the eurozone's annual inflation rate remained stable at 2.0% in August, according to data released by Eurostat.
Christine Lagarde, the President of the ECB, led the press conference and stated that the 'disinflationary process is over' and that the eurozone is 'in a good place'. The inflation rate for August remained consistent compared to June and July, both at 2.0%.
Inflation rates for various sectors showed mixed results. Non-energy industrial goods had an annual inflation rate of 0.8%, remaining unchanged from July. On the other hand, food, alcohol, and tobacco saw the highest annual rate of inflation at 3.2%. Energy, however, experienced a negative annual inflation rate of -2.0%, an improvement from -2.4% in July.
Services, a significant sector of the economy, also saw an annual inflation rate of 3.1% in August. No new information about the inflation rates for these sectors was provided.
Lagarde cited a resilient labour market, a stable inflation outlook, and upwardly revised growth projections for 2025 as reasons for the positive economic situation. She emphasized that the ECB is 'not on a predetermined path' and future policy moves will depend on economic data.
The current inflation rate suggests that more rate cuts from the European Central Bank are unlikely to come soon due to robust economic growth. This August's inflation rate is a slight decrease from the earlier estimated 2.1%.
The new data was announced after the European Central Bank chose to keep interest rates steady last week. Lagarde reiterated that the ECB will continue to monitor economic conditions closely and adjust its monetary policy as necessary to ensure price stability and support the economic recovery.
