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MNI BRIEF: Sticky EZ Inflation Gives ECB Pause For Thought

(MNI) London

Mixed messages for European Central Bank policymakers in the August inflation data, but a tick lower in the core rate to 5.3% y/y will offer some respite, although the hawks will continue to point to the continuing elevated levels.

According to Eurostat's flash inflation print, headline inflation was unchanged at 5.3% y/y in August, with the ex-energy, food, alcohol and tobacco rate at 5.3% y/y. Services inflation also slowed in the month, but remains elevated at 5.5% y/y.

Although many at the ECB accept inflation is trending lower, the speed of decline is probably not as quick as some would like to see. The August inflation data, added to the mix of releases in recent weeks, isn't a smoking gun for a hike or pause at the September meeting, but offers ammunition to both sides of the debate. (MNI SOURCES: ECB Mulls September Hawkish Pause, August CPI Key)

Source: Eurostat

MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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