Investing.com – Consumer price inflation (CPI) in the euro zone climbed more than expected in August, official preliminary data showed on Thursday.
In a report, Eurostat said consumer price inflation rose by a seasonally adjusted 1.5% in August, above expectations for an increase of 1.4% and compared a final reading of a 1.3% advance in the prior month. That was its highest level since April of this year.
According to Eurostat, and looking at the main components of euro area inflation, energy is expected to have the highest annual rate in August (4.0%, compared with 2.2% in July), followed by services (1.6%, stable compared with July), food, alcohol & tobacco (1.4%, stable compared with July) and non-energy industrial goods (0.5%, stable compared with July).
Core CPI, which excludes food, energy, alcohol, and tobacco costs, increased by a seasonally adjusted 1.2% in August, from the same period a year ago. That was in line forecasts and the prior month’s reading.
The European Central Bank’s inflation target is officially close to, but below, 2.0% and will make its next monetary policy decision on September 7.
Though markets do not expect a rate hike until well into 2018, they will be looking for clues from ECB president Mario Draghi on when the euro zone monetary authority plans to begin tapering its asset purchase program, currently set to expire at the end of the year.
After the report, EUR/USD was at 1.1904 compared to 1.1890 ahead of the release, while EUR/GBP traded at 0.9230 compared to 0.9221 earlier.
Meanwhile, European stock markets were trading higher. The Euro Stoxx 50 gained 0.45%, Germany's DAX advanced 0.49%, France’s CAC 40 traded up 0.49%, while London’s FTSE 100 rose 0.59%.