BERLIN (Reuters) – German inflation looks set to ease slightly in July, data from four economically key German states indicated.
Compared with the same month last year, July inflation rates in Saxony, Baden-Wuerttemberg and Bavaria were down 0.1 percentage points from the year-on-year figures reported in June, coming in at 6.7%, 6.8% and 6.1%, respectively.
In North Rhine-Westphalia, Germany’s most populous state, the change was slightly larger, with year-on-year inflation at 5.8% in July, compared with 6.2% reported the month before.
“Price pressures are coming down a little faster than expected across the board,” said Berenberg Bank chief economist Holger Schmieding, referring to North Rhine-Westphalia.
There, the so-called core rate – which excludes the strongly fluctuating prices for energy and food – also dropped.
“If this should also show up in the data for the euro zone as a whole, it could become an argument for the ECB not to raise its interest rates further,” Schmieding said.
National inflation data will be published at 1200 GMT, with economists surveyed by Reuters forecasting a 6.6% year-on-year rise, down from 6.8% in the previous month.
European Central Bank (ECB) President Christine Lagarde ditched her practice of guiding markets for the bank’s next decision in September and stressed it would depend on the data, after the ECB raised rates a ninth consecutive time on Thursday.
(Reporting by Rene Wagner and Miranda Murray, Editing by Rachel More and Sharon Singleton)
