In Germany, inflation slowed down, recording -0.1% cyclical in August and +1.9% year-on-year (from +2.3 in July) based on the just-published preliminary data. Destatis reports this. According to the unified index, inflation is negative 0.2% month-on-month and +2% year-on-year.
Core inflation, which adjusts for energy and food prices, fell slightly to 2.8% from 2.9%. Analysts said that “slowing inflation is putting pressure on the European Central Bank to cut interest rates again next month, after a cut in June.”
In Spain, a sharp decline in inflation
Spanish inflation also slowed sharply in August, falling to 2.2% year-on-year, due to lower fuel and food prices, according to a provisional estimate published by the National Statistics Institute (INE). This rate, which has fallen for the third consecutive month, is 0.6 points lower than the July figure (2.8%), according to the public body. The Spanish inflation rate is approaching the 2% target set by the European Central Bank. The INE said in a press release that this slowdown is mainly due to lower fuel prices, which have increased compared to the same period last year, and lower food prices.
Lane (ECB): Wage growth to slow significantly in 2025-26
Eurozone wage growth will slow sharply in 2025 and 2026, Philip Lane, the European Central Bank’s chief economist, said at a conference in Frankfurt. Lane said the second half of this year would see “a lot of pay rises” but that the wage recovery was relative to inflation. “It has now peaked” and the pace will be much slower in the next two years.
ECB on track for second rate cut
Lane’s comments come about two weeks after the European Central Bank’s Governing Council monetary policy meeting, which is expected to trigger a second rate cut after the first 25 basis point cut announced in June.
“Internet trailblazer. Travelaholic. Passionate social media evangelist. Tv advocate.”
