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Eurozone inflation hits 3-year low
Eurozone inflation fell to a three-year low of 2.2% in August, while Tokyo's core inflation accelerated to 2.4% amid rising utility costs and food prices
Eurozone inflation hit a three-year low of 2.2% in August
Headline CPI in Tokyo surged to 2.6%
Eurozone CPI falls to 2.2%, core inflation down to 2.8%
Annual inflation in the Eurozone declined to 2.2% in August, marking its lowest point since July 2021, in line with market expectations. Core inflation, which excludes volatile items such as food and energy, dropped to 2.8%, the lowest level in four months. The softer inflation figures are reinforcing market expectations of a 25 basis points rate cut at the upcoming European Central Bank (ECB) meeting, scheduled in less than two weeks.
In France, the annual inflation rate slowed to 1.9% in August 2024, the lowest since August 2021, down from 2.3% in July. However, this figure slightly exceeded the forecasted 1.8%, according to preliminary estimates.
Bundesbank President Joachim Nagel issued a warning, emphasizing that a swift return to price stability should not be assumed. He stressed the need for caution in the ECB's monetary policy approach, suggesting that policy rates should not be reduced too rapidly.
Tokyo inflation accelerates in August
Tokyo’s consumer price index (CPI) data for August indicated a further rise in inflation in Japan, with core inflation (excluding food) increasing to 2.4% year-on-year, surpassing expectations of 2.2%. The core inflation figure has been climbing consistently each month since reaching a low of 1.6% in March.
Additionally, the core-core CPI, which strips out both food and energy costs, edged up to 1.6% from 1.5%. The headline CPI rose to 2.6% from 2.2%. Analysts often view Tokyo’s inflation data as a precursor to national trends, and some economists pointed out that the rise was largely driven by the withdrawal of government subsidies on utility bills and a surge in rice prices. They anticipate that underlying inflation trends could ease in the coming months as these temporary factors fade.
Japan also reported a 2.8% month-on-month increase in industrial production for July, slightly below the expected 3.3% rise. Looking forward, manufacturers surveyed by the Ministry of Economy, Trade, and Industry forecast a 2.2% increase in output for August, followed by a projected 3.3% contraction in September.
