Flash August Euro area HICP inflation to print at 0.1% yoy

Consumer prices are expected to decline to 0.1% yoy in August from 0.2% yoy in July. The sustained weakness in energy prices, especially in Brent, and more recently, in gasoline prices, is exerting downward pressure on the headline component. The food component should continue to remain stable. The core component is expected to soften slightly, led by lower prices of goods. The euro-area CPI inflation reading in July remained unchanged at 0.2% yoy. The core reading was 1.0% yoy as expected and higher than the 0.8% yoy seen in June . In detail, energy prices fell further from -5.1% yoy in June to -5.6% yoy, with food prices at 0.9% yoy compared to 1.1% yoy also in June. Prices of non-energy industrial goods rose from 0.3% yoy to 0.4% yoy while prices paid for services ticked up from 1.1% yoy to 1.2% yoy. 

"We expect euro-area HICP inflation to average 0.2% in 2015 and 1.3% in 2016, while the core metric should remain stable at 0.8% in 2015 and 1.1% in 2016", says Societe Generale.