German inflation jumps unexpectedly

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Consumer price growth was reinforced by a jump in services prices, which increased to a new record of 5.3pc in June. Energy inflation also rose to 3pc.

Germany’s core inflation – which strips out volatile food and energy prices – climbed from 5.4pc to 5.8pc.

It follows figures from earlier this week suggesting that Germany could remain in a recession for the rest of the year.

A closely-watched barometer of Germany’s business activity posted its lowest reading since November 2022, after the index dropped from 91.5 in May to 88.5 in June.

All sectors of Germany’s economy have slumped amid higher energy costs, with manufacturing in particular facing a “substantial decline”.

Rising inflation in Germany contrasts with Spain and Italy.

Spain on Thursday announced it drastically reduced headline inflation 1.6pc in June from 2.9pc in May, as a result of lower fuel, electricity and food prices.

The results means that Spain has become the first major eurozone economy to reduce inflation below the European Central Bank’s 2pc target since the Ukraine invasion caused food and energy prices to spike, according to the country’s ministry.

Meanwhile, annual inflation in Italy fell to 6.7pc in June, down from 8pc in May, according to data released Wednesday. French and eurozone inflation data is due on Friday.

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