Eurozone inflation was stable in August, against expectations of a slight rise, as food, industrial goods and services prices increased by less than in July, piling more pressure on the European Central Bank to act.

Inflation in the 19 countries sharing the euro was 0.2 per cent, the same rate as in July, EU’s statistics agency Eurostat said yesterday in its first estimate.

The decline in energy prices was not as steep as a month earlier, but prices of food, industrial goods and of services rose by less.

The rate was below market expectations from a Reuters poll of 50 economists, which had an average of a 0.3 per cent increase.

Core inflation, which according to the ECB’s definition excludes the most volatile components of unprocessed food and energy, was also unchanged at 0.8 per cent, again 0.1 percentage points below market expectations.

The inflation rate remains far from the ECB’s target of just below two per cent and its failure to rise is bad news for the central bank which is seeking to prevent a deflationary spiral.

The ECB has been buying €80 billion worth of assets a month to pump money into the economy.

Interest rates have been cut below zero and free loans offered to banks.

Its rate-setting Governing Council meets next week, although most investors do not expect further policy measures until the fourth quarter.

Excluding energy, food, alcohol and tobacco products, the August inflation rate dipped to 0.8 per cent. Energy prices dropped by 5.7 per cent year-on-year, compared with 6.7 per cent in July. Prices in food, alcohol and tobacco products went up 1.3 per cent, against 1.4 per cent in July.

In the services sector, the largest in the eurozone economy, prices were 1.1 per cent higher year-on-year, from 1.2 per cent in the previous month.

Eurostat’s flash estimate for the month does not include a monthly calculation.