Euro Area Inflation Drops

Inflation in the euro area dropped in August, according to figures released by Eurostat, the statistical office of the European Union.

A flash estimate from the body showed inflation was down from 1.6 per cent in July to 1.3 per cent in August, showing the recovery of the European economy may be strengthening.

The organisation stated that food, alcohol and tobacco are expected to have the highest annual rate in August, with inflation of 3.3 per cent, down from 3.5 per cent in the previous month.

Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland make up the euro area.

Eurostat revealed that services inflation was 1.5 per cent in August, compared with 1.4 per cent in July.

Figures recently showed that the inflation rate in the UK fell during July, although it remains well above the two per cent target.

The Office for National Statistics announced that inflation dropped from 2.9 per cent in June to 2.8 per cent in July.

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