Inflation slowed in France and Italy and held steady in Spain in August, official data showed on Friday, August 29, as the European Central Bank weighs its next move on interest rates next month. French annual inflation reached 0.9% this month, down from 1.0% in July, as transport and energy prices eased, the INSEE statistics agency said.
Under the "harmonized" metric favored by the ECB, consumer prices rose by 0.8% compared to 0.9% in July. Italy's inflation rate slowed to 1.6% in August from 1.7% in July as the rise in energy prices eased. The harmonized rate, however, was the same at 1.7%.
In Spain, the harmonized inflation rate remained stable at 2.7% as fuel prices fell less than last year, while food and electricity costs eased. The ECB kept its interest rates steady in July as policymakers waited to see the impact of US President Donald Trump's tariffs on the eurozone.
Days after the ECB meeting, the European Union and the United States reached a trade deal that sets US tariffs on EU goods at 15%, down from Trump's threat of 30%. The ECB rate pause brought to an end a streak of consecutive cuts stretching back to September 2024 that has seen the central bank slash its benchmark deposit rate to 2%.