- Howard Archer, an economist at IHS Global Insight
Consumer prices in the Euro zone continued to rise modestly in August, despite falling energy prices. Inflation in 19-country currency bloc held at 0.2% in the year to August, unchanged from the previous month. Core inflation, which excludes volatile food and energy prices, rose 1.0% in August, compared to the 1.0% increase seen a month before. The headline inflation has been in what the ECB calls the 'danger zone' - below 1% since October 2013. In Italy, consumer prices rebounded after a negative 0.1% in July to a 0.2% growth in August. In annual terms, cost of living in the Euro zone's third biggest economy climbed 0.2% in the reported period. The data came ahead of the European Central Bank policy meeting later this week, with some analysts believing that the central bank will eventually ramp up its asset-buying programme.
Meanwhile, German shoppers spent more money in July compared with the preceding month. Retail turnover in the Euro area's number one economy rose 1.4% in real terms on a monthly basis in July, up from s revised 1.0% drop a month earlier. When measured on an annual basis, the reading surged 3.3% in the reported month after the 5.2% growth in June. The German economy is expected to continue on a positive path and grow well in the second half of 2015, the German Bundesbank estimated.
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