Eurostat, the statistical office of the European Union (EU), announced on Tuesday its flash estimate revealed Euro area annual inflation rose 3.0 percent in August, sharply accelerating from 2.2 percent in July. This represented the highest rate since November 2011. Economists had forecast the rate to increase to 2.7 percent.

Looking at the main components of euro area inflation, energy had the highest annual rate in August (+15.4 percent y-o-y), followed by non-energy industrial goods (+2.7 percent y-o-y), food, alcohol & tobacco (+2.0 percent y-o-y) and services (+1.1 percent y-o-y).

Meanwhile, the core indicator, which excludes volatile energy and unprocessed food prices, jumped 1.6 percent y-o-y in August after a 0.7 percent y-o-y gain in the previous month. This was the highest reading since July 2012. Economists had expected a 1.5 percent y-o-y advance.