Energy drives euro zone inflation higher in August

Fri Sep 14, 2012 5:33am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

BRUSSELS (Reuters) - Fuel and transport costs drove euro zone inflation higher for the first time in 11 months in August, limiting the capacity of the European Central Bank to cut interest rates further.

Consumer inflation in the 17-nation euro zone was 2.6 percent in August, the EU statistics office Eurostat said on Friday, confirming its earlier estimate. It was the first increase since September 2011.

Inflation had been at 2.4 percent in May, June and July.

Month-on-month, Eurostat said prices had risen by 0.4 percent in August, compared with a 0.5 percent fall in July.

Excluding energy and food, alcohol and tobacco, whose prices also rose sharply in the month, the annual inflation rate was 1.5 percent, with prices for communications the heaviest fallers, down 3.1 percent year-on-year.

Transport prices were 4.8 percent higher in August than a year earlier, alcohol and tobacco prices were up 4.5 percent and housing was 4.1 percent more expensive.

Brent crude futures rose to as high as $117 per barrel in August, although the euro appreciated against the dollar during the month. The price had been below $100 per barrel for much of June.

After communications, prices for recreation and culture and education fell the most.

When the flash estimate was released at the end of August, some economists felt inflation would rise further in September.   Continued...

People make their shopping at a supermarket in Lisbon August 30, 2011. REUTERS/Jose Manuel Ribeiro