October 2, 2018 / 9:16 AM / 8 months ago

Euro zone producer prices pushed up by energy in August

BRUSSELS (Reuters) - Euro zone producer prices rose more-than-expected in August, driven higher by more costly energy, according to data released on Tuesday.

EU statistics agency Eurostat said prices at factory gates in the 19 countries sharing the euro rose 0.3 percent month-on-month in August against market expectations of a 0.2 percent rise in a Reuters poll of economists.

Year-on-year, producer prices rose by 4.2 percent in August, against market expectations of a 3.9 percent gain.

Figures for July were also revised up to 0.7 percent month-on-month and to and an 18-month high of 4.3 percent year-on-year.

Energy prices rose 0.9 percent during August and were 12.0 percent higher than a year earlier.

Without volatile energy, producer prices were unchanged month-on-month and up 1.5 percent year-on-year, confirming the view of European Central Bank that spiking energy prices are the main reason for higher inflation.

Prices at factory gates herald trends in consumer inflation because unless absorbed by intermediaries or retailers, higher producer costs translate directly into higher consumer prices.

The European Central Bank wants to keep consumer inflation below, but close to 2 percent over the medium term. An early Eurostat estimate showed last week that in September, consumer inflation was 2.1 percent year-on-year.

Reporting by Philip Blenkinsop

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