Inflation accelerates across the euro area
The euro area's annual inflation rate stood at 3.2% in August 2026, an increase from 2.9% in July, according to figures released by Eurostat, the European Union's statistical office. A year earlier, in August 2025, the rate had been 2.0%. For the European Union as a whole, annual inflation also reached 3.2% in August 2026, up from 3.0% in July. Across the member states, the lowest annual rates were recorded in Sweden at 0.3%, Estonia at 1.3% and Czechia at 1.5%. The highest rates were seen in Romania at 6.3%, Lithuania at 5.6% and Cyprus at 5.2%. When compared with July 2026, annual inflation declined in six member states, remained unchanged in one and rose in twenty.[S1]
Services and energy drive the increase
In August 2026, the main positive contributions to the annual euro area inflation rate came from services, which added 1.43 percentage points, and energy, which added 1.29 percentage points. Non-energy industrial goods contributed 0.30 percentage points, while food, alcohol and tobacco added 0.22 percentage points. These contributions illustrate how much each component of the Harmonised Index of Consumer Prices (HICP) influenced the overall annual rate. The figures are calculated using a method that ensures the contributions add up to the total, allowing for rounding.[S1]
Methodology and upcoming data
The year-on-year inflation rate tracks how the cost of consumer goods and services compares with the same month twelve months earlier, whereas the month-on-month measure sets prices against the preceding month. Eurostat's flash estimate for August 2026, issued on 1 September 2026, came in at 3.3%. A flash estimate for September 2026 is due on 2 October 2026. Bulgaria's accession on 1 January 2026 expanded the euro area to 21 countries; figures through December 2025 cover the earlier 20-country group, and from January 2026 they cover all 21, with adjustments made through a chain index formula.[S1]
