Euro zone inflation soars more than expected before ECB meeting

Euro zone inflation soars more than expected before ECB meeting

In August, euro zone inflation edged up more than expected, as official data disclosed on Thursday. It’s because the European Central Bank gets ready to discuss whether to tighten its monetary policy after 2-1/2 years of decent stimulus or not.

Inflation in the 19-country currency economic bloc, set by the ECB at below 2%, grew to 1.5% in August from 1.3%, coming ahead of hopes for 1.4% following higher energy costs, as Eurostat informed on Thursday.

Evidently, underlying inflation, or prices excluding energy costs and volatile food, a figure closely monitored by ECB policymakers, stood still at 1.3%, surpassing forecasts for 1.2%.

While the figures might strengthen the case of conservative policymakers, already pushing for the EU’s major financial institution to wind down its asset-buying in 2018, the ECB is currently dealing with a strengthening common currency, suppressing prices. By the way, tightening policy would make this asset more attractive.

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