Eurozone producer price index flat in August

The producer price index for the Eurozone was at a a flat 0.0 per cent in August, indicating no change in the average price level month-on-month, after expectations it would increase 0.1 per cent. July's figure was 0.2 per cent - the first increase since February.

Core prices crept up just 0.1 per cent year-on-year and the index continues to be down 0.8 per cent (expected -0.6 per cent) in August, owing to significantly lower energy prices.

Energy prices rose by 0.2 per cent in the month of August but were down 3.3 per cent year-on-year.

Howard Archer, chief UK and European economist for IHS Global Insight, comments:

Muted producer prices in August - following on from consumer price inflation dipping to a 43-month low of 1.1% in September - reinforces belief that underlying Eurozone inflationary pressures remain muted and that the ECB has ample scope for further stimulative action if it feels the need to act.