In August, Greece experienced a slight easing of inflation, with the rate dropping from 3.5% in July to 3.4%, according to Eurostat's Spain Harmonized Index of Consumer Prices. Meanwhile, Eurozone inflation remained stable at 5.3%.
Specifically, the prices of food, alcohol, and tobacco products in Greece increased by 9.2% year on year in August, compared to a 10% increase in July. Recent data suggests that inflation is rising again in Spain and France.
Isabelle Schnabel, a member of the European Central Bank's Executive Board, has highlighted that the economic outlook for the Eurozone is worse than previously expected in June. She also noted a steady increase in core inflation. While Schnabel refrained from making any forecasts for September, she acknowledged the challenges posed by the current economic situation.
However, market expectations indicate that the ECB is unlikely to take any action in September. The cycle of interest rate hikes is projected to end later this year with a final 25 basis point increase to 4%.
Analysts are concerned about the possibility of stagflation in Europe, characterized by a combination of weak economic activity and high inflation.
