MercoPress. South Atlantic News Agency

Euro zone inflation eases but economic confidence is down

Separate figures have shown as easing of inflation in the Euro zone, but a fall in economic confidence. An initial estimate from EU statistics agency Eurostat showed that the annual rate of inflation eased in August to 3.8% from a record 4% in July as oil prices cooled.

Driven by soaring oil and food prices, high inflation has been hitting European consumers' purchasing power and businesses' margins as they struggle to cope with a weakening economy. But a European Commission survey showed that confidence in the Euro zone economy fell in August to the lowest level in more than five years, although consumers' outlook improved slightly. The commission's Euro zone economic sentiment indicator eased in to 88.8 points from 89.5 in July. Although the fall brought the overall index to its lowest point since March 2003, there was a brief ray of light on consumer confidence, which improved in August for the first time in over a year. The commission's separate monthly business climate indicator for the Euro zone also declined, dropping to a negative 0.33 points in August from a negative 0.2 in July. Meanwhile, other Eurostat figures showed that the Euro zone unemployment rate held steady in July for the fourth month running at 7.3%.