Inflation slowed in France and Italy while holding steady in Spain in August, according to official data released Friday, as the European Central Bank (ECB) prepares to decide on interest rates next month.
France’s national statistics agency INSEE reported that annual inflation fell to 0.9% from 1.0% in July, driven by lower transport and energy costs. Under the harmonised index used by the ECB, French consumer prices rose 0.8% compared with 0.9% the previous month.
In Italy, annual inflation slipped to 1.6% in August from 1.7% in July, reflecting a slowdown in energy price increases. However, the harmonised rate remained unchanged at 1.7%.
Spain’s harmonised inflation rate held steady at 2.7%, with food and electricity prices easing but fuel costs falling less sharply than last year.
The latest figures arrive as the ECB weighs its monetary policy direction after leaving interest rates unchanged in July. The bank had paused following a year-long cycle of consecutive cuts that began in September 2024, reducing its benchmark deposit rate to 2%.
Policymakers are monitoring the economic fallout from U.S. tariffs imposed under President Donald Trump. Earlier this month, the European Union struck a trade deal with Washington to limit tariffs on EU goods to 15%, down from Trump’s earlier threat of 30%.
The ECB’s next policy meeting in September is expected to focus heavily on inflationary pressures across the eurozone, as well as the impact of U.S. trade measures on European growth.
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