European Inflation Down
Inflation across the Eurozone has been recorded as falling over the month of July, according to official regional figures released today.
Price rises across the 13-strong Eurozone region were down on last month’s figures, according to the Eurostat report released early this morning.
From 1.9% in June, inflation fell to 1.8% through July, remaining within the European Central Bank’s guideline rate of 2%.
Amongst some of the most significant contributors to inflation were tobacco and alcohol and leisure sectors, which continue to support much of the price rises across the Eurozone month on month.
Despite today’s news, analysts have still widely predicted the European Central Bank will raise interest rates by a quarter of a percent when they next meet in early September.
However, with poor growth figures released from three of the major economies in the region over the last week, a further interest rate rise may even further suppress the regeneration effort.
With ongoing fears of a lack of credit availability on a global level, spawned largely from the US sub-prime lending sector, the European Central Bank last week joined the Federal Reserve and the Bank of Japan in offering cash aid to rescue their respective finance and lending industries.
However, many analysts have claimed the move of the European Central Bank in injecting liquidity into finance and considering raising interest rates simultaneously is contradictory, calling for flexibility and sensibility to prevail when the bank meets to decide its interest rate policy next month.
“It’s a crazy situation of a central bank raising rates and at the same time adding liquidity into the system. What is the message the central bank is putting across by doing that?”
The news is expected to have some impact on trading across European markets over the course of the morning.
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