Over the past twelve months, the inflation rate increased slightly to 2.4%, reflecting ongoing inflation trends.

The European Central Bank (ECB) is adopting a cautious stance, keeping interest rates unchanged amid economic uncertainty caused by US tariffs and other factors, with a decision expected on September 11.

Most economists anticipate the ECB will maintain current interest rates in September, while US monetary policy outlooks may differ.

Inflation trends influence economic decisions, as both very low and very high inflation can threaten growth, potentially leading to investment delays.

Despite inflation slightly exceeding the ECB's target, the ECB has paused interest rate hikes, considering recent easing of inflation pressures in France and elsewhere.

Germany's consumer price inflation rose to 2.2% in August 2025, driven mainly by rising food prices, after being at 2% in June and July.

Core inflation, excluding food and energy, remained steady at 2.7%, indicating persistent inflation pressures.

Energy costs continue to fall, and recent inflation data, along with declining inflation in France, support the ECB's decision to pause rate increases after multiple cuts.

Experts view the inflation increase as manageable, citing recent ECB rate cuts and falling inflation in France as reasons for confidence.

Economists and the Bundesbank expect that inflation may be temporarily higher in the coming months due to ongoing price fluctuations and base effects.

There is a warning that inflation could rise further before stabilizing, with no immediate ECB rate cuts anticipated.

Service sector prices, including restaurants, hotels, and insurance, increased by an average of 3.1%, partly driven by rising wages, while energy prices decreased by 2.4% year-on-year.

Despite inflation, real wages in Germany increased by 4.1% in the second quarter of 2025, resulting in a 1.9% rise in consumers' purchasing power, helping offset inflation impacts.

Economists suggest inflation remains stubborn, with no immediate decline expected and potential for further food price increases.

Energy prices continued to decrease in August, with a 0.2% monthly drop, but annual energy prices fell by 2.4%, influenced by base effects from the previous year.

In Portugal, the consumer price index for August was estimated at a 2.5% year-over-year increase, consistent with the previous month.