Eurozone inflation picks up but remains below target

BRUSSELS – Official figures show that inflation across the 19-country eurozone spiked up to a four-month high of 1.5 per cent in the year to August largely because of higher energy costs.

The increase from the previous month’s 1.3 per cent was anticipated in financial markets but still means that inflation remains below the European Central Bank’s goal of just below 2 per cent.

As a result, most economists think the ECB will play it safe at next week’s policy meeting and hold off from any big announcement on how it will rein in its monetary stimulus program despite the eurozone’s pick-up in growth.

Eurostat also reported Thursday that the core rate, which strips out potentially volatile items such as food and energy, was unchanged at 1.2 per cent, a sign of stubborn inflation pressures.