German Inflation At 6-Month Low, Core Figure Accelerates First Time In 4 Months

RTTNews | 62 days ago
German Inflation At 6-Month Low, Core Figure Accelerates First Time In 4 Months

(RTTNews) - Germany's consumer price inflation slowed for a second straight month in April to its lowest level in six months as energy prices continued to fall, but the core price growth accelerated for the first time since December as services cost growth increased, which warrants caution from the European Central Bank that is set to reduce interest rates further.

The consumer price index rose 2.1 percent year-on-year following a 2.2 percent increase in March, preliminary data from the statistical office Destatis showed on Wednesday. Economists had forecast 2.0 percent inflation for April. Latest inflation was the lowest since October when the rate was at the same level.

ING economist Carsten Brzeski attributed the slowdown to lower energy prices and less of the usual seasonal impact from the Easter break in April. The economist expects trade tensions and fiscal stimulus to influence headline inflation going forward.

Meanwhile, core inflation which excludes prices of food and energy climbed for the first time in four months, rising to 2.9 percent in April from 2.6 percent in March. The core inflation rate was the highest since January when it was the same.

Inflation based on the harmonized index of consumer prices slowed for a third month in a row in April, easing to 2.2 percent from 2.3 percent in March. The rate is the lowest since September when it was 1.8 percent. Economists had forecast 2.1 percent inflation for April.

The CPI rose 0.4 percent month-on-month in April after a 0.3 percent increase in March, which was in line with economists' expectations.

The HICP climbed 0.5 percent from March when the EU measure rose 0.4 percent. Economists were looking for a 0.4 percent increase.

Energy prices slumped 5.4 percent year-on-year, marking the biggest fall since October. Food inflation slowed to 2.8 percent from 3.0 percent. Goods inflation slowed to 0.5 percent from 1.0 percent.

Services inflation accelerated for the first time since December, rising to a three-month high of 3.9 percent from 3.5 percent in March.

Commerzbank economist Marco Wagner said the continued substantial wage increases are likely driving up prices in this labor-intensive sector more strongly than it appeared recently.

The economist expects headline inflation to remain around the same level in coming months as energy prices continue to decline and services cost growth continue to be driven by substantial wage increases.

Flash estimates released earlier on Wednesday revealed that the German economy recovered in the first quarter underpinned by higher private consumption and investment. Gross domestic product grew 0.2 percent sequentially, entirely reversing the 0.2 percent fall in the preceding quarter.

"For the ECB, today's growth and inflation reports clearly pave the way for some additional, though very gradual and measured, rate cuts, without giving any reasons for panic," ING's Brzeski said.

read more
Eurozone Inflation Hits ECB Target

Eurozone Inflation Hits ECB Target

Euro area inflation rose slightly to hit the European Central Bank's 2 percent target in June on slower fall in energy prices and the rise in services inflation, flash estimate from Eurostat showed on Tuesday. Annual inflation climbed to 2.0 percent in June from 1.9 percent in May. The rate reached the inflation target and also matched economists' expectations.
RTTNews | 10h 6min ago
Eurozone Manufacturing Sector Contraction Slows In June

Eurozone Manufacturing Sector Contraction Slows In June

Eurozone manufacturing activity contracted at a slower pace in June as output showed a sustained expansion and total new work stabilized ending a 37-month period of decline, final survey data from S&P Global showed on Tuesday. The HCOB manufacturing Purchasing Managers' Index posted 49.5 in June, up from 49.4 in May. This was the highest score since August 2022.
RTTNews | 10h 40min ago
Eurozone Household Lending Grows Most In 2 Years

Eurozone Household Lending Grows Most In 2 Years

Lending to euro area households grew the most in two years in May and overall private sector credit growth remained stable, data from the European Central Bank revealed on Monday. Adjusted loans to households increased 2.0 percent year-on-year in May, the strongest since May 2023, when it was up 2.1 percent. Meanwhile, loans to businesses grew 2.5 percent from a year ago.
RTTNews | 1 day ago
Eurozone Economic Sentiment Falls Unexpectedly

Eurozone Economic Sentiment Falls Unexpectedly

Eurozone economic sentiment weakened unexpectedly in June primarily driven by reduced confidence in industry and retail trade, a monthly survey data from the European Commission showed on Friday. The economic confidence index fell to 94.0 in June from 94.8 in May. The score was forecast to rise to 95.1. The industrial confidence index posted -12.0 in June, down from -10.4 a month ago.
RTTNews | 4 days ago
French Inflation Accelerates In June

French Inflation Accelerates In June

France's inflation accelerated more than expected in June largely due to higher services costs but the overall rate remained below the 2 percent target, preliminary estimate from the statistical office INSEE showed on Friday. Consumer prices increased 0.9 percent year-on-year in June, faster than the 0.7 percent rise in May. The rate was forecast to remain unchanged at 0.7 percent.
RTTNews | 4 days ago
German GfK Consumer Confidence To Drop In July

German GfK Consumer Confidence To Drop In July

German consumer confidence is set to drop in July after rising for three straight months as rising willingness to save offset the positive impetus provided by improved income prospects. The forward-looking consumer sentiment index fell unexpectedly to -20.3 in July from -20.0 in the previous month, a survey jointly published by the market research group GfK and the Nuremberg Institute for Market
RTTNews | 5 days ago
German Ifo Business Confidence Strongest In 13 Months

German Ifo Business Confidence Strongest In 13 Months

German business confidence rose to the highest level in 13 months in June driven by improving hopes that fiscal measures will underpin economic recovery, a closely watched survey showed on Tuesday. The business climate index registered 88.4 in June, up from 87.5 in May, the Munich-based ifo Institute revealed. This was the highest level since May 2024, when the reading was 88.9.
RTTNews | 7 days ago