Euro area consumer price inflation stood at 2.0% in August 2025, slightly below a preliminary estimate of 2.1%, as energy costs declined more than initially thought. Headline inflation has now matched the European Central Bank’s 2% target for a third straight month, reinforcing expectations that monetary policy will remain steady for some time. Price dynamics were mixed across categories: unprocessed food inflation edged higher to 5.5% from 5.4% in July, while energy prices fell 2.0% after a 2.4% drop the previous month. Services inflation eased to 3.1% from 3.2%, and processed food, alcohol, and tobacco prices rose 2.6%, down slightly from 2.7%. Non-energy industrial goods inflation was unchanged at 0.8%. Core inflation, which strips out food, energy, alcohol, and tobacco, held steady at 2.3%—its lowest since January 2022.
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