Headline annual inflation is expected to dip slightly again this month to 6.0%, which will continue to be a welcome development for the ECB. The positive takeaway to this is that the German government did introduce measures to deal with high prices from June to August last year, so an added dip here should on paper reflect better inflation dynamics.
That being said, we’re still at 6% on the headline and core prices are arguably still much elevated. According to Destatis, core annual inflation is seen at 5.5% in July but at least it did slow from 5.8% in June. Meanwhile, food prices are still elevated as well as it is up by 11.0% compared to the same period last year.
On the balance of things, the inflation readings today should side with the ECB to perhaps pause in September as they let the previous rate hikes filter through to the economy even more. Policymakers have continued to tout further monetary policy transmission and the data should afford them that bit of time, especially since they also need to balance out worsening economic developments in the region.
Here’s the agenda for today:
- 0530 GMT – North Rhine Westphalia
- 0800 GMT – Brandenburg
- 0800 GMT – Hesse
- 0800 GMT – Bavaria
- 0800 GMT – Baden Wuerttemberg
- 0900 GMT – Saxony
- 1200 GMT – Germany national preliminary figures
Do note that the releases don’t exactly follow the schedule at times and may be released a little earlier or later.
