Despite the cost of oil surging to record levels euro zone inflation was stable in August. Consumer prices rose 2.2% from a year ago, the same as the increase in July. The European Central Bank aims to keep annual inflation below, but close to 2%. And, excluding energy, consumer prices in the 12 countries that use the euro, rose just 1.3% from a year ago, unchanged for the third month running.
The core inflation rate, which ignores energy, food and tobacco prices, also rose 1.3%. The core rate has not been that low since February 2001. The EU statistics agency, Eurostat, said that lower costs for phone calls, clothes and food helped offset rising fuel and transport prices. Eurostat calculated that energy costs are up 11.6% from a year ago The ECB says rising oil prices are one of the main threats to growth and price stability in the euro zone.