The cost of living has also increased in the eurozone as a whole.
As the European statistical office Eurostat announced on Tuesday after an initial estimate, consumer prices rose by 3 percent in August.
In July the inflation rate was 2.2 percent.
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With regard to the main components of inflation in the euro area, “energy” is expected to have the highest annual rate in August (15.4% versus 14.3% in July), followed by “non-energy industrial goods” (2.7% versus 0%). 7 percent in July), “food, alcohol and tobacco” (2.0 versus 1.6 percent in July) and “services” (1.1 versus 0.9 percent in July).
Germany reported a further rise in inflation on Monday, from 3.8 percent in July to 3.9 percent in August, after 2.3 percent in June.
In addition to energy, food and services, for example in restaurants and hotels, had become more expensive.
Rise in inflation also in France
Other countries in the euro area have now also reported an increase in inflation, including France as well as Spain. The inflation rate there has climbed from 1.5 to 2.4 percent. After all, this is the highest value since October 2018. There is now no country in the euro zone with negative inflation, i.e. where prices are falling on average, as was the case a few months ago. Estonia now has an inflation rate of 5 percent.
However, the European Central Bank considers the rise in inflation to be temporary and due to all kinds of special effects related to the pandemic. After the meeting of the Governing Council in July, ECB President Christine Lagarde said that the central bank would keep its policy expansionary until the inflation rate not only reached 2 percent, but rather stuck near 2 percent in the medium term. The ECB does not see this situation as being achieved in the long term.
It is true that the inflation rate in the eurozone was 1.9 percent as early as June in the immediate vicinity of its target.
However, Lagarde views the recent rise in the inflation rate largely as a temporary phenomenon, which can be explained by effects such as higher energy prices and the temporary VAT hike in Germany.
Even if the inflation rate could continue to rise until the end of the year, a decline in the first few months of the coming year is likely.
Interest rate hike in 2025 at the earliest
The investment bank Goldman Sachs now believes that the ECB will not raise key interest rates until 2025 at the earliest. At least it is likely to reduce the pace of its bond purchases in the foreseeable future. "We expect that the ECB will slow down the pace of its bond purchases under the PEPP crisis program in the fourth quarter of this year," said Jari Stehn, chief economist at Goldman Sachs. The ECB will then only buy bonds for 65 billion euros per month in the crisis program and no longer for 80 billion euros.
"That will be a signal that monetary policy is slowly leaving the crisis mode," said Stehn: "But what the central bank does after the PEPP crisis program expires will be more decisive." He believes it is unlikely that the central bank will end March next year , if the crisis program expires, takes no further measures and will only buy bonds for 20 billion euros a month after the longer-term purchase program APP.
"In my opinion there will be a transitional arrangement," said Stehn: "Either the ECB temporarily increases the monthly bond purchases of the APP or introduces a new program for the transitional period - or it extends the crisis program a little bit." last possibility for most likely: “a slow PEPP tapering, so to speak”.Keywords: