Inflation in the euro area, which had hovered at a low level, rose slightly in July
Consumer prices rose 0.4 percent over the same period last year, European statistics agency Eurostat reported on Aug.19. In June, the inflation rate was slightly lower – 0.3%. In particular, unprocessed foods rose in price in July: they cost 3.1% more than a year earlier. On the contrary, energy fell in price by 8.4%. Inflation in the UK also jumped unexpectedly last month to its highest level since March as clothing stores did not hold their usual summer sales. Annual consumer price inflation in Britain rose to 1.0% in July from 0.6% in June.
The ECB considers an inflation rate of almost 2% to be ideal for the economy but has been unable to achieve this target for many years, despite massive cash infusions. Due to the continuing fall in energy prices, as well as due to the temporary VAT cut in Germany in connection with the crisis due to the coronavirus. It is predicted that inflation will not rise until the beginning of 2021, as prices in Germany have remained at the same level as last year, in general, the country is kept at a level to prevent this from happening. In Spain, prices fell by 0.7%, in Greece by 2.1%. In France, the inflation rate rose to 0.9%, in Italy – to 0.8%, as reported Reuters.