BRUSSELS (Reuters) - Euro zone producer prices rose more than expected in August, driven by more expensive energy and intermediate goods, data from the European Union’s statistics office Eurostat showed on Tuesday.
Eurostat said that prices at factory gates in the 19 countries sharing the euro rose by 0.3 percent month-on-month in August and 2.5 percent year-on-year. Economists polled by Reuters had expected increases of respectively 0.1 percent and 2.3 percent.
Producer prices herald changes to consumer inflation, because their increase is usually passed on to the consumer.
The European Central Bank wants to keep consumer inflation below, but close to 2 percent over the medium term and is buying 60 billion euros worth of bonds on the secondary market to inject more cash into the economy and stimulate price growth. Consumer inflation was at 1.5 percent in August and September.
Eurostat data showed the biggest upward drivers for the overall producer price index was energy, the prices of which rose 3.4 percent year-on-year in August and intermediate goods — up 3.0 percent.
Intermediate goods are products such as salt or steel that are used to make finished products.
Without the volatile energy component, producer prices rose 0.1 percent during the month and 2.2 percent year-on-year.
Reporting By Jan Strupczewski; editing by Philip Blenkinsop