Eurozone inflation falls to 2.2%, approaching the ECB’s target.

Annual inflation in the Eurozone fell to 2.2% in August, its lowest level in three years, bringing it closer to the European Central Bank’s (ECB) target of 2%.

Annual inflation in the Eurozone dropped to 2.2% in August, marking its lowest level in three years and edging closer to the European Central Bank’s (ECB) 2% target.

Inflation had seen a slight uptick to 2.6% in July, following a modest 2.5% in June, according to estimates released on Friday by Eurostat, the European statistical agency.

The 2.2% figure in August represents the lowest annual inflation rate since July 2021 when it reached the same level. Additionally, the figure aligns perfectly with analysts’ forecasts.

According to Eurostat’s data, August’s performance was supported by a 3.0% drop in energy prices.

Meanwhile, core inflation—which analysts closely monitor as it excludes energy and food—came in at 2.8%, slightly down from 2.9% in July.

Among the major Eurozone economies, Germany recorded an annual inflation rate of 2.0% in August, down from 2.4% in July. France saw 2.2% (down from 2.7% in July), Italy 1.3% (compared to 1.6% in July), and Spain 2.4%, also significantly down from 2.9% the previous month.

These results bring Eurozone inflation closer to the ECB’s 2% target, continuing a clear downward trend from the peak of 10.6% recorded in October 2023.

Following that peak, the ECB initiated a series of sharp interest rate hikes, which only began to slow slightly in June of this year.

The ECB has a meeting scheduled for September 12, where a reduction is anticipated despite the cautious messages from the monetary institution.