EUROPEAN INFLATION
Eurozone Final HICP confirmed the August Y/Y flash print, at 2.2% Y/Y (vs 2.6% in July) although it was very close to rounding lower, whilst printing one-tenth lower sequentially at a non-seasonally adjusted 0.1% M/M (vs 0.2% flash, 0.0% in July). Services inflation picked up marginally, whilst non-energy industrial goods (NEIG, or core goods) softened. Meanwhile, energy inflation decreased after three consecutive months of Y/Y rises, and processed food, alcohol & tobacco remained broadly at July levels.
- Core inflation (ex energy, food, alcohol & tobacco) printed in line with flash at 2.8% Y/Y (2.9% prior) and 0.3% M/M (vs -0.2% in July).
- The final reading shows the largest contribution from services since October 2023 at 1.88ppts, likely in part due to lagged effects from the Paris Olympics.
- Meanwhile, the non-energy industrial goods contribution fell to 0.11ppts - the lowest contribution since March 2021 (vs 0.19 prior). This reflects a three-tenths fall in the Y/Y value to 0.4% after three months at 0.7% Y/Y.
- Energy inflation's contribution also fell significantly to -0.29ppt partly due to base effects (from 0.12 in July), this is after three consecutive months of small positive contributions.
- Finally, 'Processed food, alcohol & tobacco' and 'Unprocessed foods' inflation contribution remained unchanged at 0.41ppts and 0.05ppts.
- At a country level, Belgium saw a two-tenths downward revision from the flash HICP reading, Italy, Austria and Malta saw a one-month downward revision, whilst Greece and Lithuania saw a one-tenth upward revision.
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