Europe Sees Higher Inflation on Fleeting Factors Like Oil

FRANKFURT, Germany  — Consumer prices spiked higher than expected in Europe in August, boosted in large part by more expensive fuel. Economists say the jump is temporary, but it could raise questions about how persistent higher inflation might turn out to be.

The 19 countries that use the euro currency saw inflation spike to an annual 3.0% in August, up from 2.2% in July, according to figures released Tuesday by European Union statistics agency Eurostat.

The increase was so large in part because some prices were much lower a year ago due to one-time factors connected to the coronavirus pandemic.

Oil prices, following a price slump a year ago during the depths of the pandemic recession, contributed to a 15.4% rise in energy costs. With volatile fuel and food left out, core inflation was 1.6%. The latest figure also reflects other transitory factors, such the timing of summer retail sales in France and Italy, and the expiration of German tax breaks on retail purchases.

Economists have cited a raft of additional reasons for recently higher prices in Europe. Some hotels and tourist businesses have marked up prices after the end of pandemic lockdowns, while supply chain disruptions and higher raw material prices have raised prices for producers of goods as economic activity has picked up.

The inflation question has been getting global attention, especially after annual U.S. consumer inflation reached 5.4% in July. The International Monetary Fund says it sees inflation returning to pre-pandemic levels in most countries next year, but adds that there's high uncertainty about that. It cautioned that central banks may need to take action if price increases prove to be more persistent than expected.

Since many of the factors are temporary, economists do not expect the European Central Bank to attempt to counter inflation by curtailing its stimulus programs or by raising interest rates. The central bank's most recent projections from June see inflation hitting 1.9% for all of this year, and falling to 1.5% next year. The ECB's governing council next meets Sept. 9 to review its policy stance.

Still, higher inflation is getting public attention, as witnessed by the front page of Germany's Bild newspaper trumpeting a “new inflation shock” after German figures came in at 3.4% based on inflation outcomes of several regions, the highest in 13 years. Higher inflation expectations could play a role in wage demands by German unions in upcoming negotiations, according to Carsten Brzeski, global head of macro research at ING bank. One member of the ECB's governing council, Germany's Jens Weidmann, has warned that inflation could go as high as 5% and then decline, although the future path is uncertain.

The higher figures come after an extended period of low inflation that undershot the ECB's goal of below but close to 2%. The bank has recently revised the goal to allow for brief periods of inflation above 2%. Inflation has been low across the developed world for years, with economists theorizing that causes could include digitalization, aging populations and global competition in labor markets.


With the COVID-19 pandemic all but forgotten - despite still hospitalizing and killing people - tourists in 2023 returned to Greece in such numbers the sector is on a path to break records set in 2019 before the Coronavirus struck.

Top Stories


A pregnant woman was driving in the HOV lane near Dallas.

General News

FALMOUTH, MA – The police in Falmouth have identified the victim in an accident involving a car plunging into the ocean on February 20, NBC10 Boston reported.


Teen Girls are Being Victimized by Deepfake Nudes. One Family is Pushing for More Protections

A mother and her 14-year-old daughter are advocating for better protections for victims after AI-generated nude images of the teen and other female classmates were circulated at a high school in New Jersey.

Fewer planes and helicopters will be flying tourists over Mount Rushmore and other national monuments and parks as new regulations take effect that are intended to protect the serenity of some of the most beloved natural areas in the United States.

At least 1,300 employees of organizations representing fossil fuel interests registered to attend this year's United Nations climate talks in Dubai, more than three times the number found in an Associated Press analysis of last year's talks, as new rules took effect requiring attendees to disclose their employment.

HAILEY, Idaho (AP) — Paul Rytting listened as a woman, voice quavering, told him her story.

LONDON (AP) — Hailed as a world first, European Union artificial intelligence rules are facing a make-or-break moment as negotiators try to hammer out the final details this week — talks complicated by the sudden rise of generative AI that produces human-like work.

Enter your email address to subscribe

Provide your email address to subscribe. For e.g. [email protected]

You may unsubscribe at any time using the link in our newsletter.