Euro zone inflation eases to 1.6% in August

| September 15, 2010 | 0 Comments
Euro zone inflation eases to 1.6% in August

The Eurostat statistics agency has today revealed inflation in the euro zone eased to 1.6% in August from 1.7% in July.

Inflation across the 16-member euro zone hit its highest level in November 2008 - when it reached 2.1%.

However, since December 2008, inflation has remained under target of 2%.

The main upward pressures on inflation in August came from clothing, package holidays, air transport and accommodation.

Downward pressures, meanwhile, came from fruit, transport fuels, vegetables and cars.

Earlier this month, the European Central Bank voted to hold interest rates at the record low of 1%.

The ECB has previously said it will maintain rates at this level as a result of uneven inflation and low growth.

In related news, the European Commission recently lifted its growth prospects for the euro zone.

According to the Commission, growth of 1.8% in the EU for 2010 is expected – slightly higher than its previous estimate of 1%.

Meanwhile, for the 16-member euro zone, it is forecasting growth of 1.7% – up from the 0.9% previously forecast.

However, despite the lift in growth forecasts, the Commission said the recovery remained fragile.

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