Inflation rates in the 20 European Union countries that use the euro rose slightly in July due to a spike in energy inflation as services remained high, the EU’s main statistics agency said on Wednesday. This is expected to be 2.6%. File photo: John Angelillo/UPI | License photo
July 31 (UPI) — Eurozone inflation is expected to rise slightly to 2.6% in July, the European Union’s main statistics agency said Wednesday, due to higher annual inflation rates in energy and industrial goods. Announced.
The main consumer price index is expected to rise from 2.5% in June, with services inflation rising 4% and energy inflation rising 1.1% to 1.3%, according to preliminary estimates from Eurostat.
Inflation in food, alcohol and tobacco is expected to be 2.3%, compared with 2.4% in June, and non-energy industrial goods inflation is expected to be 0.8%, compared with 0.7% in June.
According to Eurostat, core inflation, which excludes volatile items such as energy, food and tobacco, is estimated at 2.9% and is likely to remain flat for the third straight month.
The rise in inflation comes as the European Central Bank cut its key deposit rate from 4% to 3.75% last month, citing “significantly improved” market conditions and a 2.5% drop in inflation in the euro-using European Union. This follows interest rate cuts across 20 countries. For the past 9 months.
Inflation rates rose in three of the four largest economies, led by Germany and France, rising from 2.5% in June to a level of 1.7%, and in Italy, it almost doubled to 1.7%, albeit at a low level. It is estimated that this has increased to %.
Only Spain bucked the trend, falling by 0.7%, but the region’s fourth-largest economy still had higher inflation than its competitors.
Estimates suggest that seven other countries, including Belgium, appeared to have succeeded in reducing inflation, although the rate remained the highest across the zone at 5.5%.
Ireland’s inflation rate is expected to be flat at 1.5%, while Finland’s inflation rate was the lowest at 0.6.
The ECB’s policy of trying to correctly set a single interest rate across the zone, since countries with high inflation rates require high interest rates to control inflation, while countries with low inflation rates require low interest rates. For planners, this large discrepancy is causing major headaches. needed to stimulate demand.
The euro rose against both the dollar and the pound in Wednesday’s preliminary figures, with the euro at $1.08 and 0.84 pounds in mid-session trading on foreign currency markers.
