NEWS | Wednesday, 19 September 2007

Euro area annual inflation down to 1.7%

Figures released by Eurostat, the Statistical Office of the European Communities, show a decrease in the Euro annual inflation from 1.8 percent in July to 1.7 percent in August this year. In 2006 the rate of inflation was 2.3 percent, however, the monthly inflation in August 2007 was 0.1 percent. The annual EU inflation in July 2007 was 2.0 percent however this percentage decreased to 1.9 percent in August this year.
Malta’s annual rate of 0.6 percent in August was recorded as one of the lowest annual rates of inflation in the EU. Other low rates were observed in Denmark with 0.9 percent, and the Netherlands with 1.1 percent. The highest rates of inflation were recorded in Latvia with 10.2 percent, Bulgaria with 9.3 percent, and 7.1 percent in Hungary. When compared with July 2007, records of annual inflation rose in seven Member States, remained stable in four and fell in fifteen.
The lowest 12-month averages up to August 2007 were in 0.5 percent in Malta, 1.3 percent in both France and Finland. The highest 12-month averages were observed in Latvia and Hungary both with 7.7 percent and Bulgaria with 5.7 percent.
The main components with the highest annual rates in August 2007 within the EU Area were 9.3 percent in education, 3.8 percent in alcohol & tobacco, and 3.4 percent in hotels and restaurants. The lowest annual rates were observed for communications with -1.1 percent, recreation & culture with 0.0 percent and clothing with 0.6 percent. Concerning the detailed sub-indices, restaurants and cafés recorded +0.12 percentage points, tobacco +0.09 and education recorded +0.07 had the largest upward impact on the headline rate, while fuels for transport recording -0.19, telecommunications -0.09 and heating oil -0.08 percentage points, had the biggest downward impact.
The main components with the highest monthly rates were clothing with 0.7 percent, alcohol and tobacco with 0.5 percent, and hotels and restaurants 0.4 percent, and the lowest were transport with -0.5 percent, -0.4 percent in health and -0.1 percent in recreation and culture. The largest upward impact was experienced by garments with +0.04 percentage points, accommodation services, tobacco and milk, cheese & eggs all with +0.02 each, while fuels for transport with -0.10 percentage points, -0.03 in vegetables and fruit with -0.02 had the biggest downward impact.