German Inflation Holds at ECB Target as Spain Runs 2.7% in July

Germany’s Federal Statistics Office confirmed that consumer prices rose 2.0% year-on-year in July, matching both the preliminary reading and economists’ expectations. On a monthly basis, prices increased 0.3%. Using the EU-harmonised methodology, inflation stood at 1.8% year-on-year and 0.4% month-on-month, also in line with forecasts. Separate data showed some easing in pipeline pressures: Germany’s wholesale price index fell 0.1% in June from May, trimming the annual gain to 0.5% from 0.9%. In Spain, the National Statistics Institute confirmed that consumer prices advanced 2.7% from a year earlier in July, unchanged from the flash estimate and the June pace. Prices slipped 0.1% on the month. Harmonised inflation also came in at 2.7% year-on-year, while falling 0.3% from June, a slightly smaller decline than economists had projected. Spain’s core inflation—excluding fresh food and energy—remained steady at 2.3% year-on-year but fell 0.2% month-on-month after a 0.5% increase previously. With German inflation at the European Central Bank’s 2% target and Spanish inflation moderately higher, the latest figures suggest price pressures across the euro area remain contained heading into the ECB’s policy meeting next month.