BRUSSELS, Sept 17 - Euro zone inflation rose to a four-month high of 2.1 percent in August, climbing back above the European Central Bank's two percent tolerance threshold, Eurostat said on Wednesday as it confirmed an early estimate. The increase in the inflation rate from July's 1.9 percent came as consumer prices rose 0.2 percent from the previous month and was in line with economists' forecasts. An annual increase of 2.6 percent in food prices was the main factor driving the inflation rate higher, with Eurostat citing a rise in tobacco prices, which are included in the food component, as the biggest culprit. After stripping out tobacco costs, consumer prices rose 1.9 percent from a year earlier.
Fruit and vegetable costs fell on a monthly basis, partially offsetting a sharp monthly rise of 1.0 percent in energy prices. This suggests that the impact of a summer heatwave on food prices has yet to be felt. "It would seem that the impact on food prices of the recent heatwave has not yet shown up given we are seeing a monthly decline in fruit and vegetable prices," a Eurostat official said. The measure of core prices referred to by the European Central Bank, which excludes volatile energy and unprocessed food costs, rose 0.1 percent from a month earlier and 1.9 percent from a year ago. A country-by-country breakdown showed persistently large divergences between national inflation rates. They ranged from 3.9 percent in Ireland to 1.2 percent in Finland. Italy was the only member of the euro zone to report a monthly decline in consumer prices in August.
Eurostat said there had been revisions to Dutch inflation data between June 2002 and June 2003 and that the figures still remained provisional. It said the revisions were due to errors in the processing of scanner data for supermarket products.//