In both the euro area and Germany, the inflation rate has now exceeded 8% since May; in other words, it is more than four times higher than the target of 2%. In August, the Harmonised Index of Consumer Prices for the euro area stood at 9.1%, with inflationary pressures broadly based.
Core inflation, which excludes energy and food, came to 4.3% in the euro area in August. The inflation forecasts for the next two years have likewise been raised to an average of 5.5% for 2023 and a still considerable 2.3% for 2024. The economic costs of such high inflation are severe – and they hit the most disadvantaged the hardest.