Euro area: August inflation review

According to Eurostat's Flash estimate, the Euro area annual headline inflation stabilized at 2.05% in August, slightly up from 2.04% in July. Core inflation, which excludes energy and food, alcohol and tobacco prices, held at 2.27%, versus 2.31% in the previous month. Flash estimates by components showed: The contribution of Services to annual headline inflation decreasing to 1.41pp (1.44pp in July). The contribution of Food, Alcohol and Tobacco going down to 0.62pp (0.63pp in July). The contribution of the Energy inflation at -0.18pp (-0.22pp in July). Non-Energy Industrial Goods (NEIG) contribution rising to 0.20pp (0.19pp in July). Should the price level of headline HICP remain at its August preliminary level until end-December 2025, headline inflation would average 2.09%yoy over 2025 and stand at 1,77%yoy in December. Communication: Starting this week, we are changing our 'Special Report' into 'EMEA Macro Insights' which will provide in-depth economic analyses. Similarly, our 'Data Snap' will become the 'EMEA Macro Snapshot', offering a shorter analysis related to recent events. A similar name harmonization will be applied to our US and LatAm publications. Happy back to school to everyone.