Inflation in Germany fell more sharply than expected in June, mainly on easing energy and food prices. Although core inflation stayed unchanged, there's little evidence of indirect effects from energy prices into costs of other goods, Commerzbank's Ralph Solveen says in a note. Based on available data, the eurozone's inflation rate for June is likely to be slightly lower than the consensus forecast of 3.0%, he says. However, oil prices are set to return to somewhat higher than current levels in the coming months, due to recurring bad news from the Middle East, Solveen says. That means inflation is likely to move sideways between 2.5% and 3%, and given companies will likely pass on higher energy costs to customers, core inflation may rise slightly again, he adds. (edward.frankl@wsj.com)
Dow Jones Newswires
Energy Costs Still Drive Inflation, Though Little Evidence of Indirect Effects — Market Talk
- Sources
- Dow Jones Newswires
- Markets
- Economy
- Active symbols
- ECONOMICS:DEIRYY
- Language
- English
Inflation in Germany fell more sharply than expected in June, mainly on easing energy and food prices. Although core inflation stayed unchanged, there's little evidence of indirect effects from energy prices into costs of other goods, Commerzbank's Ralph Solveen says in a note. Based on available d…