Inflation in Europe has reached a 10-year high ahead of a European Central Bank meeting that is scheduled to take place in a little over one week.
Consumer prices in the Euro Zone rose by 3% in August from a year ago, according to preliminary estimates, after rising by 2.2% in July.
Germany, Europe’s biggest economy, reported its highest consumer prices since 2008, with a headline inflation rate of 3.4% in August.
The European Central Bank, which is due to meet on September 9, is expected to discuss the future of its asset purchase program as its governing council seems divided about when to start relaxing stimulus measures.
France’s central bank governor, Francois Villeroy de Galhau, said the European Central Bank should take into consideration the recent economic recovery when discussing what to do with its COVID-19 stimulus package.
The latest inflation numbers will put pressure on European central bankers, especially when combined with comments from the U.S. Federal Reserve, which said it is considering lifting stimulus before the end of this year.
The European Central Bank’s mandate is to achieve 2% headline inflation over the medium term. Its own forecasts are currently projecting a spike in inflation this year to 1.9%, due to what they describe as temporary factors, before falling back to 1.5% and 1.4% in 2022 and 2023.
