Inflation Slows France Italy: Price growth dipped in both countries in August as ECB weighs next rate move. Spain’s inflation held steady at 2.7%

Inflation Slows France Italy in August, offering fresh signals to the European Central Bank (ECB) as it considers its next move on interest rates next month.

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Official data released Friday revealed a downward trend in consumer prices in both nations, while inflation held steady in Spain.

France’s annual inflation dropped to 0.9% in August, down from 1.0% in July, according to statistics agency INSEE. The drop was attributed primarily to easing transport and energy costs.

Using the ECB’s harmonised metric, French consumer prices rose by just 0.8%, a decrease from 0.9% in the previous month.

In Italy, inflation slowed to 1.6% in August from 1.7% in July, again driven by moderating energy prices.

The harmonised inflation rate remained unchanged at 1.7%, reflecting a more stable pricing environment.

Spain, meanwhile, posted a stable harmonised inflation rate of 2.7%, unchanged from July.

While food and electricity prices eased, a slower decline in fuel costs helped maintain the overall level.

The data arrives as the ECB held interest rates steady in July, ending a streak of rate cuts that began in September 2024, which saw the benchmark deposit rate reduced to 2.0%.

This rate pause followed mounting uncertainty around US-EU trade tensions, which were partially eased after a recent US-EU deal capped tariffs at 15%, down from the previous threat of 30% under former President Donald Trump.

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With inflation cooling across key eurozone economies, the ECB may now face less urgency to cut rates further when it meets again in September.