Eurozone inflation edges up to 2.1 pct in August: Eurostat

BRUSSELS - Annual inflation in the eurozone ticked up to 2.1 percent in August, slightly higher than the 2 percent recorded in July, according to a flash estimate released Tuesday by Eurostat.

Food, alcohol, and tobacco remained the strongest drivers of price growth, rising 3.2 percent year-on-year in August compared with 3.3 percent the previous month. Services inflation eased marginally to 3.1 percent from 3.2 percent in July, while non-energy industrial goods held steady at 0.8 percent.

Energy prices continued to contract but showed improvement, registering a 1.9 percent annual decline in August after a 2.4 percent drop in July.

Among major eurozone economies, Germany's annual inflation rose from 1.8 percent in July to 2.1 percent in August. Spain held steady at 2.7 percent, while France saw a modest decrease from 0.9 percent to 0.8 percent. Estonia posted the highest rate at 6.2 percent, up from 5.6 percent, whereas Cyprus slipped into deflation at minus 0.1 percent after a 0.1 percent increase in July.

"Eurozone inflation remains delightfully dull," said Bert Colijn, chief economist at ING, noting that while global economic risks persist, overall inflation continues to hover close to the European Central Bank's (ECB) 2 percent target.

Andrew Kenningham, chief Europe economist at Capital Economics, added that the modest uptick in headline inflation is unlikely to influence monetary policy. "ECB policymakers look certain to leave interest rates unchanged at next week's meeting and probably for several months beyond that," he said.

The ECB confirmed in July that it would maintain its key interest rates at its latest rate-setting meeting.