Final euro area HICP inflation to confirm flash at 0.2% yoy

While Euro Area's food and services recorded the highest annual rate, continued weakness in energy prices (especially in Brent, and more recently, in gasoline prices) kept the energy component weak at -7.1% yoy in August compared to -5.6% in July, cutting 16bp from the headline figure. 

"Euro Area consumer prices are expected to remain stable at 0.2% yoy in August (the third consecutive month of stable prices) led by higher prices for food, alcohol & tobacco, and services", forecasts Societe Generale. 

Food prices increased from 0.9% yoy in July to 1.2% yoy in August, adding 6bp to the headline figure. For core components, services maintained its rate of increase at 1.2% yoy during the month while non-energy industrial goods increased from 0.4% yoy in July to 0.6% yoy in August, contributing 5bp.

"Looking ahead, Euro area HICP inflation is expected to average 0.2% in 2015 and 1.1% in 2016, while the core metric should average 0.8% in 2015 and 1.2% in 2016", says Societe Generale.