Inflation jumped in France and Spain in August as elevated energy costs continued to push price growth above target, adding to pressure on the European Central Bank ahead of its September rate decision.
French consumer prices were 2.7% higher than a year earlier, up from an annual inflation rate of 2.4% in July, according to European Union-harmonized data from the country's statistics agency Insee published Friday. This was in line with a consensus of economists polled by The Wall Street Journal.
The rise reflects continued upward pressure on energy prices as the U.S.-Israel war with Iran drags on. A tentative peace deal in June brought energy prices lower and helped inflation return to target after peaking at 2.8% in May. But a resumption of hostilities in the Middle East has pushed inflation higher again in recent months.
Meanwhile, Spain saw an annual inflation rate of 4.5% in August, compared with 3.9% in the prior month. This came in slightly hotter than the 4.4% expected by economists.
The ECB is widely expected to raise interest rates for the second time since the war began at its Sept. 10 meeting in an attempt to prevent higher energy costs from feeding through into other areas of the economy.
Still, French data showed an easing of services inflation in August, pointing to limited second-round inflationary effects in a key sector of the economy. In Spain, price growth was driven largely by higher fuel and electricity prices.