Falling inflation in the eurozone

Last Friday came the preliminary data for the eurozone, inflation for August falls back. This means that the pressure on the European Central Bank and, by extension, also the Swedish central bank to lower their policy rates increases.

The preliminary data shows that inflation in the eurozone fell to 2.2 percent in August, compared to 2.6 percent for July. According to Bloomberg, the decline is in line with the average forecast among analysts. If this result were to be confirmed, it would be the lowest level in the eurozone in three years. Both France and Germany, which are major European countries, have reported weaker inflation figures for August.

The main reason for the falling inflation is the lower energy prices. CPIF-XE is not as happy reading, with inflation only falling to 2.8 percent compared to 2.9 percent in July. Unlike energy prices, services prices in the eurozone are heading in the wrong direction, rising faster in August than in July, according to monthly figures.