Eurozone inflation hits 3.3% in August, highest since September 2023

Euro area annual inflation accelerated to 3.3% in August, reaching its highest level since September 2023 as surging energy costs pushed the rate further above the European Central Bank's medium-term target of 2%, according to a flash estimate released by Eurostat on Tuesday.

Energy costs drive acceleration

The EU's statistical office said consumer prices increased 0.4% on a monthly basis in August. Annual energy inflation climbed sharply to 14.3% from 10.3% in July, with energy prices rising 2.9% month on month. Annual inflation for non-energy industrial goods also increased to 1.2% from 0.9%.

Underlying price pressures

Services inflation eased to 3% from 3.3%, while inflation for food, alcohol and tobacco remained unchanged at 1.2%. Core inflation, which excludes energy, food, alcohol and tobacco, edged down to 2.4% from 2.5%. Inflation excluding only energy remained stable at 2.2%, according to the data.

National divergences

Among euro-area members, Lithuania recorded the highest annual inflation rate at 5.8%, followed by the Greek Cypriot Administration at 5.2% and Bulgaria at 5.1%. Spain's annual inflation climbed to 4.5%, while the rate stood at 4.2% in Belgium, 3.2% in Italy, 2.9% in Germany, and 2.7% in France. The lowest annual rates were recorded in Estonia at 1.3%, Malta at 1.9%, and Finland at 2.4%.