Inflation in the world's richest nations eased for the third straight month in August, the OECD said on Tuesday, dragged down by slowing price rises in Europe's moribund economy. Consumer prices rose by 1.8 percent in the year to August in the 34 advanced democracies which make up the Organisation for Economic Co-operation and Development, down from 1.9 percent in July.
The fall has been driven by Europe, where concerns about stalling inflation have already prompted the eurozone's central bank to take unprecedented action to stimulate the bloc's moribund economy. Low inflation can be a drag on economic growth as consumers tend to spend less, weakening business output and cutting government revenues - a particular issue for highly indebted eurozone governments.
OECD data showed that all of the nine members that experienced a decline in prices over the 12 months to August were in Europe. Only six countries registered falling inflation in the year to July. The figures come after the European Union published figures on Tuesday showing inflation fell again to 0.3 percent in September, the lowest level since the peak of the financial crisis some five years ago. Food prices were a key reason why EU inflation was so much weaker than in other rich nations. In the 28-member bloc, food price inflation fell 0.9 percent, compared to a 2.9 percent rise in the US.
OECD inflation overall was also dragged down by weaker energy prices, which rose 0.7 percent in the year to August compared with 2.3 percent in the year to July. In the Group of 20 leading developed and developing economies, which account for nine tenths of global economic output, inflation also eased by 0.1 percent from the previous month to 2.7 percent in August.
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