Eurozone Inflation Hits 3.3% Amid Soaring Energy Costs

The Eurozone's annual inflation rate has hit 3.3% in August, its highest level since September 2023. The European Central Bank's medium-term target of 2% is now further out of reach due to surging energy costs. According to a flash estimate from Eurostat, consumer prices increased by 0.4% on a monthly basis in August.

Energy costs were the main driver of this acceleration, with annual inflation climbing sharply to 14.3% from 10.3% in July. Energy prices rose 2.9% month on month, while annual inflation for non-energy industrial goods increased to 1.2% from 0.9%. Underlying price pressures eased slightly, with services inflation dropping to 3% from 3.3%, and core inflation edging down to 2.4% from 2.5%.

Among euro-area members, Lithuania had the highest annual inflation rate at 5.8%, followed by Greece's Cypriot Administration at 5.2% and Bulgaria at 5.1%. Spain's annual inflation climbed to 4.5%, while rates stood at 4.2% in Belgium, 3.2% in Italy, 2.9% in Germany, and 2.7% in France.