Rising German Inflation Raises Chance of ECB September Hike
Dow Jones
Jul 30
1504 GMT - German inflation data shows the first tentative signs of knock-on or indirect effects of higher energy prices on the rest of the economy, ING's Carsten Brzeski says. Mainly energy drove inflation to 2.8% in July, from 2.3% in June, but also goods, transportation and healthcare sectors saw prices accelerate. Looking ahead, the path of inflation will be highly affected by the war. "We still expect some knock-on effects from higher energy prices on transportation costs, food prices and other industrial products over the coming months," Brzeski notes. Together with surprisingly strong eurozone growth data for the second quarter and improving sentiment indicators, the European Central Bank will probably use rising inflation to justify a September rate hike, he adds.
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