Eurozone inflation: Prices edge up to 2.1% in August, ECB likely to hold rates steady

Inflation in the eurozone rose slightly to 2.1% in August from 2% in July, official data showed on Tuesday, fuelling expectations that the European Central Bank (ECB) will keep interest rates unchanged at its policy meeting next week.The EU’s statistics agency Eurostat said the uptick was mainly driven by a smaller fall in energy prices. While energy costs continued to decline, they fell by 1.9% compared with 2.5% in July, AFP reported.Analysts polled by Bloomberg had expected inflation to remain at 2%, in line with the ECB’s target. The increase now reinforces expectations that policymakers will leave rates unchanged at their September 11 meeting. The ECB had already paused rate cuts in July, ending a streak of consecutive reductions that began in September 2024.Core inflation — which excludes volatile categories like energy, food, alcohol and tobacco — remained steady at 2.3% in August.Meanwhile, food, alcohol and tobacco prices eased to 3.2% from 3.3% in July, while services inflation also softened marginally to 3.1% from 3.2%.