| Consensus | Consensus Range | Actual | Previous | |
| Month over Month | 1.9% | 1.6% | ||
| Year over Year | 6.6% | 6.5% to 7.1% | 8.2% | 5.8% |
Highlights
Euro area producer prices intensified in August 2026, signalling mounting cost pressures at the production stage. Monthly inflation accelerated from 1.6 percent in July to 1.9 percent, while prices stood 8.2 percent above their level a year earlier.
Energy was the dominant pressure point, with prices rising 5.6 percent monthly and
21.0 percent annually. In contrast, prices excluding energy increased just 0.2 percent monthly, suggesting that the immediate acceleration was concentrated rather than uniformly spread across industry. Nevertheless, annual increases of 6.8 percent for intermediate goods indicate substantial pressures within production supply chains.
Consumer goods presented a mixed picture. Durable goods prices rose 3.4 percent annually, whereas non-durable goods prices fell 0.8 percent, demonstrating that upstream inflation had not translated into consistent price increases across all product categories. The figures suggest an energy-led cost shock that could squeeze manufacturers’ margins or feed into consumer prices, depending on firms’ pricing power and demand conditions. Persistent energy increases could also discourage investment and weaken competitiveness.
However, producer price inflation alone does not establish the scale of eventual consumer inflation, making the extent of cost transmission crucial to the outlook. These latest updates take the RPI to 8 and the RPI-P to minus 5, meaning that economic activities are now within the expectations of the euro area economy.
Market Consensus Before Announcement
Wholesale prices are expected to rise 6.6 percent on year in August, up from 5.8 percent in July.
Definition
The Producer Prices Index (PPI) measures the gross trading price of industrial goods sold into the domestic market. Changes in the index provide a guide to inflation from the point of view of the product's producer/manufacturer and, in contrast to the consumer price index (CPI), excludes VAT and other deductible taxed associated with turnover. The PPI covers manufacturing, mining and quarrying and utilities but excludes construction. The headline index can be very volatile so financial markets look at a core index to better understand underlying trends. This excludes the often highly erratic energy subsector.
Description
The PPI measures prices at the producer level before they are passed along to consumers. Since the producer price index measures prices of consumer goods and capital equipment, a portion of the inflation at the producer level gets passed through to the HICP. By tracking price pressures in the pipeline, investors can anticipate inflationary consequences in coming months.
Like the HICP, Eurostat's producer price index is also harmonized across the EMU and the larger EU membership. Producer price indexes provide another layer of information on inflation and can be an early warning of inflationary pressures building in the economy. They also record the evolution of prices over longer periods of time. The PPI reports on input prices or commodity prices and can tell whether producers are able to pass through increases in costs to their customers.
The PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to manufacturers increase, businesses are faced with either charging higher prices or taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.
Producer prices are more volatile than consumer prices. The CPI includes services components which are more stable than goods, while the PPI does not. Commodity prices react more quickly to supply and demand. Volatility is higher earlier in the production chain. Partly because of this, financial markets will look to the core (ex-energy) index to provide a better guide to underlying trends.