More costly oil boosts July euro zone prices as expected

* Oil boosts July euro zone inflation

* Year-on-year rate remains contained at 1.7 percent

BRUSSELS, Aug 16 (BestGrowthStock) – More expensive fuel for
transport boosted year-on-year inflation in the euro zone in
July as expected, data showed on Monday, as it offset the
downward pull on the index from cheaper clothes.

Consumer prices in the 16 countries using the euro fell (Read more about the trembling euro. ) 0.3
percent month-on-month in July for a 1.7 percent year-on-year
rise, the European Union’s statistics office Eurostat said.

The annual figure was the same as earlier estimated by
Eurostat and in line with market expectations, although
economists had forecast a deeper month-on-month decline in the
index of 0.4 percent.
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For full data see:
http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-16082010-AP/EN/2-16082010-AP-EN.PDF
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The European Central Bank wants to keep inflation at just
below 2 percent over the medium term.

Energy prices were flat month-on-month but 8.1 percent
higher year-on-year, data showed, while prices of clothes were
9.7 percent lower against June and only 0.7 percent higher than
a year earlier.

Without the volatile energy and unprocessed food prices — a
measure that the European Central Bank calls core inflation —
the monthly decline of prices was 0.5 percent for a 1.0 percent
annual rise — as expected by economists polled by Reuters.

In the euro zone’s biggest economy Germany, where the
economy grew by at the fastest rate since reunification in the
second quarter, July inflation was only 0.3 percent month on
month and 1.2 percent year-on-year.

In second biggest France, prices fell 0.3 percent
month-on-month in July for a 1.9 percent annual increase.

(Reporting by Jan Strupczewski, editing by Luke Baker)

More costly oil boosts July euro zone prices as expected