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Inflation over indexation threshold

News Business 17.08.2012 Aaron Grunwald
Photo: Carlos Goulão/Creative Commons

Economy: Annual inflation in Luxembourg was slightly above euro zone and EU averages last month, according to figures released by Eurostat on Thursday.

The EU’s official statistics agency said consumer prices in the Grand Duchy rose 2.7% between July 2011 and July 2012. The average in the 17 country euro area was 2.4% and across the 27 member EU was 2.5%.

In Luxembourg, average inflation of more than 2.5% over a six month period triggers indexation, or automatic increases in salaries and state pension payments.

Eurostat said alcohol and tobacco, housing, and transport were the biggest drivers of inflation in the euro zone. Communications, education, and recreation and culture saw the slowest price growth.

Consumer prices in nearby countries rose more slowly. In Belgium inflation was 2.0%, in France it was 2.2%, and in the Netherlands the figure was 2.6%.

The highest rates of inflation in the euro area were seen in Hungary (5.7%), Malta (4.2%) and Estonia (4.1%), and the lowest figures were recorded in Sweden (0.7%), Greece (0.9%), and Germany and Latvia (1.9%).

Luxembourg-based Eurostat compiles inflation figures from national statistics agencies and the data is then used by the European Central Bank to help determine monetary policy.