- The Bank of England raised its benchmark interest rate to 5.25% despite a slowdown in consumer-price rises, leading to speculation about when the central bank will end its monetary tightening.
- House prices in Britain fell by 3.8% in July compared to the same month last year, the sharpest decline since July 2009, but the average house price was still higher than earlier this year.
- The Bank of Japan raised its cap on the yield of Japanese ten-year government bonds from 0.5% to 1%, causing the yield to soar to nine-year highs.
- Turkey's annual inflation rate increased to 47.8% in July, the first rise since October, due in part to a new tax on fuel.
- The euro area's economy grew by 0.3% in the second quarter, with much of the growth attributed to changes in intellectual property shifting by multinationals based in Ireland for tax purposes. Germany's GDP growth rate was zero, and Italy's fell by 0.3%.
### Summary
The Czech Republic's inflation rate dropped to 10.2% in July, although it still ranks fourth among EU nations with the highest inflation rates.
### Facts
- 💰 The Czech Republic's inflation rate dropped to 10.2% in July, but it remains one of the EU nations with the highest inflation rates.
- 🇪🇺 The European Union as a whole saw a moderate drop in year-on-year inflation rate from 6.4% to 6.1% in July.
- 💹 The eurozone's inflation declined slightly from 5.5% to 5.3% in July.
- 📉 Inflation rates in the EU spiked last summer due to a surge in energy prices, reaching 9.8% for the EU and just under 9% for the eurozone.
- 📊 Among EU nations, Belgium had the lowest year-on-year inflation rate at 1.7%, while Hungary had the highest at 17.5%.
- 🌡️ In a month-on-month comparison, consumer prices in the EU remained stagnant in July, with a marginal 0.1% decline in the eurozone.
- 💶 The European Central Bank continues to face the challenge of persistently high inflation and has implemented nine consecutive interest rate hikes since July 2020.
- ⚖️ The Czech Republic has also maintained a similar strategy, keeping its base interest rate at 7% in an attempt to curb inflation and attract foreign investors.
### Summary
European stock markets edged higher, supported by a drop in German producer prices and a smaller-than-expected rate cut from China. German producer prices fell significantly in July, indicating a retreat in inflationary pressures. The European Central Bank is considering a pause in its hiking cycle, which could help alleviate economic difficulties in Germany. In China, the rate cut announced by the People's Bank of China was seen as underwhelming, as analysts had expected a larger cut. The U.K. housing market also slumped, with the fastest decline in August since 2018. Oil prices rebounded, supported by the Chinese rate cut and expectations of lower output from top producers in August.
### Facts
- 📉 German producer prices dropped 1.1% in July and fell 6.0% annually, indicating a retreat in inflationary pressures.
- 🇩🇪 Economic difficulties in Germany are affecting the eurozone's growth and may lead to a recession.
- 🏦 ECB President's speech at Jackson Hole will provide clues on the central bank's next move in September.
- 🇨🇳 The People's Bank of China announced a smaller-than-expected rate cut, disappointing analysts.
- 🏘️ The U.K. housing market experienced its fastest decline in August since 2018.
- 🛢️ Oil prices rose due to the Chinese rate cut and expectations of lower output from top producers.
### Summary
German producer prices in July saw their first year-on-year decline in over two-and-a-half years, falling 6.0%, due to easing energy price pressures, signaling a potential abatement of inflation in Europe's largest economy.
### Facts
- 📉 German producer prices declined by 6.0% in July compared to the same month last year.
- ⚡ Energy prices sank 19.3% in July on a yearly basis, with electricity prices falling by 30.0%.
- ❌ Excluding energy prices, producer prices in July rose 2.0% compared to the previous year.
- 📉 On a monthly basis, producer prices decreased by 1.1% in July.
- 🔍 Germany's producer price index, a key indicator for inflation, fell to 6.5% in July.
Real wages have fallen in most European countries as record-high inflation has eroded the nominal wage growth, with Hungary experiencing the largest decline of 15.6 percent, while Belgium and the Netherlands saw small increases.
Greece's inflation rate rose to 3.5% in July, but it still remains the sixth lowest among EU members, with higher inflation rates observed in other countries such as Belgium, Luxembourg, Spain, Cyprus, and Denmark; however, Greece does have the ninth highest inflation rate in food compared to other EU nations.
The euro fell to a two-month low against the dollar and a 12-month low against the pound after German and eurozone business activity slumped more than expected in August, leading to concerns about the state of the European economy and potential pauses in tightening measures by the European Central Bank, while the dollar rose to a two-month peak amid positive U.S. economic data.
European bonds and stocks fell as inflation data suggested that inflation in the euro region may not be fully subsiding, while utilities led the decline in the Stoxx Europe 600 and the German and Spanish inflation data complicated the outlook for European policy makers.
German inflation fell slightly in August, but economists predict that the downward trend will continue in the coming months, with food prices showing above-average growth.
Euro zone inflation in August came in higher than expected at 5.3%, posing a challenge for the European Central Bank as it remains unchanged from the previous month.
Euro zone inflation holds steady in August, but underlying price growth falls, complicating decisions for the European Central Bank as it considers a pause in rate hikes amid a slowdown in economic growth.
US inflation remains above 3% as the cost of goods and services rose by 0.2% in July, prompting speculation that the Federal Reserve may freeze interest rates to manage inflation without causing a recession.
Consumer prices in the eurozone rose 5.3% on average this month compared to last year, with core inflation easing to 5.3%, potentially increasing pressure on the European Central Bank to raise interest rates.
Eurozone inflation remains at 5.3%, leading analysts to speculate that the ECB may consider pausing its interest rate hikes in light of a slowing economy.
Europe is facing economic challenges including rising inflation and energy crises caused by Russia's invasion of Ukraine, but there are signs of slow recovery and easing inflation in the future, providing opportunities for businesses like Nestle SA, Unilever plc, and PepsiCo, Inc. This article also provides a ranking of the richest to poorest countries in Europe by GDP per capita (PPP).
Inflation in Turkey reaches highest level since December 2022, with prices increasing nearly 60% compared to last year, fueled by the depreciation of the Turkish lira and independent economists suggesting consumer prices have risen as much as 128%.
The European Commission has revised down its economic forecast, citing high prices for goods and services as a significant factor, leading to reduced growth projections for the European Union and the eurozone. Germany is expected to experience a downturn, while inflation is projected to exceed the European Central Bank's target. Weak consumption, credit provisions, and natural disasters are also contributing to the loss of momentum in the economy. However, the report highlights the strength of the EU labor market with a low unemployment rate.
The U.S. Consumer Price Index (CPI) is expected to have jumped 0.6% in August, driven by resurgent oil prices, while the core CPI is anticipated to have dipped to a 4.3% year-over-year pace; this higher inflation has dampened the summer rally for bitcoin and other cryptocurrencies, as interest rates are likely to stay higher and for longer than anticipated by investors.
British grocery inflation fell to its lowest level in a year in September, with prices rising fastest in products such as eggs, sugar confectionery, and frozen potato products, providing some relief for consumers and the government.
The European Central Bank is expected to see inflation in the euro zone remain above 3% next year, which strengthens the case for an interest rate increase.
Despite claims by the Biden administration and corporate media that inflation is decreasing, the latest consumer price index from the Bureau of Labor Statistics shows that Americans paid 3.7 percent more for basic consumer items in August compared to the previous year.
The European Central Bank has raised key interest rates by 0.25 percentage points to help bring down inflation, although the economy is expected to remain weak for a while before slowly recovering in the coming years.
The European Central Bank has raised its main interest rate for the 10th consecutive time to tackle inflation, but indicated that further hikes may be paused for now, causing the euro to fall and European stocks to rally.
Euro zone consumer inflation in August remained more than twice the European Central Bank's target, with a year-on-year rate of 5.2%, although slightly lower than initially estimated, according to Eurostat.
UK inflation unexpectedly fell in August to 6.7%, easing pressure on the Bank of England to raise interest rates, with falling prices for hotels and air fares offsetting the rising cost of fuel.
European markets rise as global investors await the U.S. Federal Reserve's monetary policy decision; retail stocks lead gains while oil and gas dip slightly, and U.K. inflation falls below expectations in August.
EUR/USD nears September low as market cautious ahead of inflation figures and the US Dollar gains strength, while the Euro temporarily benefits from a better-than-expected German IFO survey.
German inflation is likely to ease significantly in September based on data from five key German states, signaling the potential end of high inflation that has weighed on Europe's largest economy.
Germany's inflation rate in September slowed to the lowest level since Russia invaded Ukraine, potentially leading the European Central Bank to reconsider its interest rate hikes.
The European Central Bank's efforts to curb inflation through interest rate hikes have led to the lowest inflation rate in the euro zone in two years, indicating a potential slowdown in economic growth.
Consumer spending in the US increased by 0.4% in August, while core inflation fell below 4.0% for the first time in over two years, potentially reducing the likelihood of an interest rate hike by the Federal Reserve.
The sharp decline in inflation in Europe in September raises hopes for relief from high consumer costs, but concerns remain regarding higher oil prices and the ECB's ability to achieve its 2% inflation target.
The unemployment rate in the eurozone reached its lowest level ever at 6.4% in August, thanks to the strong economic recovery following the COVID-19 pandemic, with the highest rates recorded in Spain and Greece, and youth unemployment remaining higher than the general population.
Supermarket competition in the UK has led to the first monthly drop in food prices in over two years, with prices down 0.1% in September, according to the British Retail Consortium (BRC). The BRC also reported that grocery inflation fell to 9.9% in September, down from 11.5% in August, while overall shop price inflation decreased to 6.2%. Although prices are still rising, the rate of inflation is slowing, providing some relief for households. However, the BRC warned of potential risks such as high interest rates, climbing oil prices, and supply chain disruption.
Turkish annual consumer price inflation rises for the third consecutive month, reaching 61.53% in September due to recent tax hikes and lira weakness, just below expectations; economists predict inflation to reach 70% by year-end.
India's retail inflation is expected to drop below 6% in September due to cooling prices for essential commodities, although food inflation stood at around 10% in August.
UK grocery price inflation has reached its lowest rate in over a year, with the price of butter dropping by 16p compared to last year, according to Kantar, although prices for items such as eggs, sugar confectionery, and frozen potato products are still on the rise.
The U.S. government's upcoming inflation report is expected to show a cooling off of inflation, with overall prices for consumers rising by 0.2% compared to August and 3.6% compared to a year ago, and core inflation expected to be up 4.1% from September last year, indicating slower price increases in September than in August.
Canada's annual inflation rate falls to 3.8% in September, grocery prices rise more slowly.
Food prices fell in September for the first time in two years, but fuel prices increased sharply, resulting in an overall inflation rate of 6.7%; however, wages outpaced inflation for the first time in almost two years, alleviating some financial pressure for households.
UK inflation remains unchanged at 6.7% in September, raising doubts over Rishi Sunak's pledge to halve inflation by the end of the year, as rising fuel prices offset the first monthly fall in food prices in two years.
