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2025-07-31 20:29:17
German inflation unexpectedly accelerates its decline, adding further uncertainty to expectations for a rate cut? ⑴ Preliminary German inflation data for July showed a year-on-year increase of 1.8%, below analysts' expectations of 1.9%. ⑵ This was also lower than the previous month's 2.0% year-on-year increase. ⑶ The EU's Harmonized Index of Consumer Prices (HICP) showed a 0.4% month-on-month increase in July, in line with market expectations. ⑷ However, the year-on-year increase was 1.8%, below the expected 1.9%. ⑸ Data from the Federal Statistical Office showed that Germany's consumer price index (CPI) rose 0.3% month-on-month in July, exceeding market expectations of 0.2%. ⑹ Despite being the eurozone's largest economy, Germany's inflation data is often viewed as a leading indicator of overall eurozone inflation. ⑺ This unexpected decline in inflation may reignite market speculation about the ECB's future path of interest rate cuts. ⑻ Given the ECB's recent cautious stance, the lower-than-expected inflation data may present new considerations for future policy decisions.
