In addition to the US CPI, producer price data released in July fell for the first time in two years by 0.5% from the previous month, while markets were expecting a 0.2% rise. On an annual basis, producer inflation fell to 9.8% from June’s 11.3%, the lowest since October and compared to forecasts of 10.4%. Core PPI rose 7.6% from a year earlier in July, easing from an 8.2% increase in the prior month. On a monthly basis, the core PPI rose 0.2%, easing from a 0.4% gain for the previous month.
Inflation in Germany fell for the second consecutive month in July, confirming the preliminary reading of 7.5% YoY. However, inflation is still near its 40-year high, mainly due to high energy and food prices. On a monthly basis, consumer prices rose 0.9% after increasing 0.1% in June.
The UK economy contracted in June, but less sharply than expected. Compared to the previous month, the economy contracted by 0.6%, but analysts had expected a decline of up to 1.3%. In the second quarter, the UK economy then contracted by 0.1%, according to preliminary data, and grew by 2.9% year-on-year.