State's 3.8% inflation is highest in EU

The euro zone's inflation rate remained unchanged at 2.1 percent in September, just above the European Central Bank's (ECB's) tolerance threshold of 2 per cent, the European Union's statistics office said yesterday.

Meanwhile, in the 15-nation European Union the annual inflation rate fell to 1.9 per cent in September from 2 per cent in August. However, the Republic had the highest inflation rate at 3.8 per cent.

Compared with August, September consumer prices in the 12 euro-zone nations rose 0.3 per cent. The annual rate in August was 2.1 per cent, the same as in August 2002, Eurostat said in a statement.

In the EU, national inflation rates continue to be wide apart in the euro zone.

Four countries had inflation rates of 3 per cent or above in September: the Republic with 3.8 per cent, Portugal with 3.2 per cent, and Italy and Spain with 3 per cent.

Germany continued to post the lowest inflation rate in the euro zone with 1.1 per cent, closely followed by Finland with 1.2 per cent and Austria with 1.3 per cent.

Eurostat said the 0.3 per cent monthly rise in September inflation was significantly affected by a 1.2 per cent rise in the cost of non-energy industrial goods following the end of summer sales. Food prices, which rose 0.6 per cent, also had some upward impact.

Energy prices, however, were steady from August to September, while a 0.3 per cent fall in the cost of services had a considerable downward impact on the monthly inflation rate following the end of the summer holidays.

Compared with September 2002, a 3.5 per cent rise in food prices had the biggest impact on inflation, followed by a 2.5 per cent rise in services, Eurostat said.

Energy prices were only 1.7 per cent up from last year and non-energy industrial goods also had a dampening effect, only rising 0.8 per cent.

Eurostat said its calculation of the September data was based on estimates, rather than actual figures, for Dutch and Greek inflation.

There were no Dutch harmonised inflation data due to delays in processing while a public sector strike in Greece delayed data.