BRUSSELS (Reuters) – Euro zone producer prices edged higher as expected month-on-month in August and plunged year-on-year on a sharp drop in energy prices, data showed on Wednesday.
The European Union’s statistics office Eurostat said prices at factory gates in the 20 countries sharing the euro were 0.6% higher month-on-month in August, but 11.5% down against a year earlier, in line with economists’ expectations.
Month-on-month intermediate goods pulled the index down with a 0.4% decline, but energy prices rose 2.5%, pushing up the overall end result.
Year-on-year, energy prices were 30.6% lower and intermediate goods prices down 4.5%, more than offsetting more expensive capital goods and durable and non-durable consumer goods.
Producer prices are an early indication of trends in consumer inflation, which the European Central Bank wants to bring down to its target of 2.0% from 5.3% in August and 4.3% in September.
(Reporting by Jan Strupczewski)
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