Is European inflation making a comeback, or just pausing before relief? August brought a minor but notable surprise for the eurozone inflation rate, which ticked up to 2.1%, slightly above expectations and the European Central Bank's target. Core inflation—which weeds out the noisy stuff like energy and food—held at 2.3% for a fourth straight month, revealing that underlying price pressures are proving stubborn but not spiraling.
Why does this matter? While inflation's still in the ECB's comfort zone, persistent stickiness (especially in services at 3.1%) hints that policymakers will likely keep interest rates on hold at their meeting next week. For everyday Europeans, the inflation story is anything but uniform: Estonia is still running hot at 6.2%, and France almost flat at 0.8%. For now, markets expect no rate move, but debate over the next steps is—with inflation this close to the wire—definitely not over.
