Europe's August Inflation Rate Eases, Reaches 10-Month Low

Sep 14, 2007 - Inflation in Europe eased more than initially estimated in August, dropping to a 10-month low because of an annual decline in energy prices.

Consumer prices in the 13-nation euro region increased 1.7 percent from August 2006, down from 1.8 percent in July, the European Union's statistics office in Luxembourg said today. Last month's rate was lower than an estimate of 1.8 percent published Aug. 31. Prices rose 0.1 percent on the month.

The European Central Bank, which has increased its key lending rate eight times since late 2005, shelved a planned increase earlier this month after a U.S. housing crisis pushed up borrowing costs and caused global financial market turbulence. Still, with oil and food prices rising, policy makers say inflation risks remain on the 'upside.'