Energy price surge lifts inflation in France, Spain in August.
A renewed jump in energy prices in August led to strong accelerations in inflation across France and Spain, with the annual rate of price growth in the latter hitting its highest in over three years.
Source: Sharecast
Spain's EU-harmonised consumer price index – which is calculated using harmonised concepts, methods, and procedures as to accurately compare rates across the continent – increased at a year-on-year rate of 4.5% in August, up sharply from 3.9% in July, according to figures out on Friday from the Instituto Nacional de Estadísticas.
While slightly below the 4.6% expected by economists, this was still the highest inflation rate seen in the Iberian state since February 2023.
Over in France, the annual change in the EU-harmonised CPI jumped to 2.7% this month from 2.4% in July, INSEE data showed, hitting its highest since May.
Meanwhile, data from Germany also released on Friday showed that import prices rose at a year-on-year rate of 6.8% in July, up from 6.1% in June and the highest since December 2022.
The indicators likely strengthen the call for the European Central Bank to raise interest rates at its September meeting, having paused its rate-hiking cycle last month. Investors already widely expect the key deposit rate to rise 25 basis points to 2.5%.
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