Inflation in the Eurozone fell to 2.2% in August.
The mentioned information was published on Friday, August 30, by the statistical agency Eurostat. It is worth noting that in this case, preliminary data are implied.
The inflation rate recorded in the Eurozone in August corresponds to a three-year minimum. This dynamic has increased expectations that the European Central Bank will decide next month to continue implementing the monetary easing strategy. The corresponding decision of the European financial regulator will mean lowering the cost of borrowing. It is worth noting that in June, the European Central Bank cut interest rates for the first time in five years.
The core rate, which does not take into account such volatile components as the cost of energy, food, alcohol, and tobacco, was recorded at 2.8% in August. It is worth noting that in July the corresponding figure was 2.9%. The dynamic of the core rate in the Eurozone corresponds to the preliminary expectations of economists who were interviewed by the media.
The euro continued its movement on a downward trajectory against the pound sterling, trading 0.1% lower at 0.8408 pounds. At the same time, the European currency rose against the dollar. The corresponding indicator increased by 0.04%, to $1.1083. This dynamic is because investors currently expect the Federal Reserve to decide on cutting interest rates in September as part of the first move to ease monetary policy in the current cycle.
ING economists expect core inflation in the eurozone to steadily above the 2.5% mark until the end of 2024. They explain this forecast by stickiness in goods and services.
