Headlines

Euro Area Inflation Rises to 2.1% in August

SEP 3 2025·Updated SEP 4 2025

Story

Above: A photo illustration of euro coins stacked upon one another. Image credit: SimpleImages/Getty Images

The Facts

Annual inflation across the euro area increased to 2.1% in August 2025, up from 2.0% in July, according to flash estimates released on Tuesday by Eurostat, the statistical office of the European Union (EU).
Eurostat
AA
www.ft.com
Eurostat reported that the primary factors in determining eurozone annual inflation were food, alcohol and tobacco at 3.2% in August, followed by services at 3.1%, non-energy industrial goods at 0.8% and energy at -1.9%.
Eurostat
Core inflation, which excludes energy, food, alcohol and tobacco prices, remained unchanged in the euro area for the fourth consecutive month at 2.3%, marking its lowest level since January 2022.
Eurostat
EuroNews
Trading Economics
In August, the highest annual inflation rates in the eurozone were recorded in Estonia (6.2%), followed by Croatia (4.6%), as well as both Latvia and Austria at 4.1%. The lowest rates, meanwhile, were in France at 0.8% and Cyprus at -0.1%.
Eurostat
The latest figures follow European Central Bank (ECB) President Christine Lagarde's assertion that the ECB had achieved its 2.0% target and will take "necessary measures to ensure inflation is under control and prices are stable."
Bloomberg.com
Radio Classique
In July, Lagarde argued that the EU was in a "good place" concerning inflation and was "well-positioned" to deal with "turbulent waters." Lagarde defined the ECB's strategy as a "wait-and-watch situation" to be decided on a meeting-by-meeting basis.
European Central Bank

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Narrative A

The slight uptick in inflation to 2.1% demonstrates that the ECB's successful monetary policy framework is working precisely as intended. Overall, the EU is in a good place, with core inflation holding steady and the economy proving resilient. The ECB's wait-and-see strategy, therefore, is clearly the right approach.

European Central Bank

ING Think

Narrative B

The European economy remains desperately lacking. Despite the measured headline, inflation for essential costs such as food and services remain well above the 2% target. With low growth and an overly-cautious ECB, the continent lacks the economic dynamism needed to make up for years of tepid decline.