German inflation slowed more than anticipated in July, providing more evidence of a gradual moderation in euro-zone price pressures as the European Central Bank nears the end of its unprecedented cycle of interest-rate hiking.
The annual reading came in at 6.5%, down from 6.8% in June. That’s less than the 6.6% median estimate in a Bloomberg survey of economists. A national measure of underlying inflation, excluding food and energy costs, also slowed.
Data earlier Friday showed French price gains moderated to 5%. In Spain, they unexpectedly accelerated — but at 2.1% remain close to the ECB’s 2% goal.
The numbers follow a separate release showing that Europe’s largest economy failed to grow for a third straight quarter between April and June, though that result did mean that Germany exited a winter recession brought on by the energy crisis.
That backdrop may further slow inflation, which has been on a downward slope as natural gas costs reversed the surge they experienced after Russia invaded Ukraine. Readings of late, however, have been pushed higher by last summer’s cheap public transport initiative by Germany’s government.
In the wider euro zone, a quarterly survey by the ECB showed professional forecasters see stronger core inflation than initially thought this year and next. Officials in Frankfurt raised rates for a ninth consecutive time on Thursday and may yet do so again when they convene again in September.
--With assistance from Joel Rinneby, Mark Evans and Jana Randow.
