Tuesday saw inflation reports from a number of European economies, including the UK, France, Spain and Italy. Among other data, the German ZEW economic sentiment report and Eurozone industrial production were also in the news.
Eurozone
The Eurostat reported that the seasonally adjusted industrial production in the 15-nation economy rose 1.1% month-on-month in August after falling 0.2% in July, which was revised from an initial estimate of a 0.3% fall. The monthly increase was in line with economists' expectation.
However, on an annual basis, industrial output continued to fall for the fourth month in a row. In August, production declined 0.7% versus a revised 1.2% decrease in July. A 1.7% fall was initially reported for July. The annual decrease recorded in August was slower than the expected fall of 1.8%.
Another significant news from the Eurozone was the German ZEW report for October. The Centre for European Economic Research, or ZEW, said its economic sentiment indicator for Germany plunged to minus 63 in October from minus 41.1 in September. Economists had expected the reading to fall to minus 50. Meanwhile, the index measuring the current economic situation in Germany slumped to minus 35.9 from minus 1 recorded in September, while the consensus forecast was for minus 15.
Among the inflation reports released today, the French statistical office INSEE said the consumer price index for all households in the whole nation decreased 0.1% month-on-month in September, after remaining flat in August. Economists had expected a flat growth for September. On an annual basis, consumer prices grew at a slower pace of 3%, compared with the 3.2% rise recorded in August and a 3.1% increase predicted. Elsewhere, the Bank of France said the French business sentiment declined sharply to 87 in September from 94 in August. The indicator stood below the expected reading of 92 in September. At the same time, the central bank said it expects the French economy to contract 0.1% in the third quarter, revised down by 0.2 percentage point. Growth carried over for 2008 at the end of the third quarter is expected to stand at 0.9%.
In Italy, a final report from the statistical office, ISTAT showed that the consumer price index including tobacco rose 3.8% year-on-year in September, compared to a 4.1% rise in August. On a monthly basis, the CPI fell 0.3%, reversing a 0.1% rise recorded in the previous month. Thus, the statistical office confirmed its preliminary estimate.
At the same time, the harmonized index of consumer prices, or HICP, rose 0.5% month-on-month, revised from an initial estimate of 0.3% and picking up from a zero growth recorded in August. Further, the statistical office revised the HICP annual growth to 3.9% from 3.7%. It was down from August's 4.2% rise.
Meanwhile, the Spanish consumer price annual inflation eased more than expected to 4.5% in September from 4.9% in August. Economists had expected the annual inflation to slow to 4.6%. Month-on-month, the consumer price index remained flat in September, in line with expectations. The HICP annual inflation stood at 4.6% for September. The number matched flash estimate released on September 29. Compared to previous month, the indicator remained flat in September versus a 0.2% fall in August.
In Finland, the statistical office said consumer price annual inflation remained stable at 4.7% in September compared with August. On a monthly basis, consumer prices increased 0.5%. In September, HICP increased 4.7% year-on-year and 0.6% on a monthly basis.
A report by Statistics Netherlands said the turnover in the retail trade grew 1.3% year-on-year in August. Turnover growth was considerably smaller than the 5.3% logged in July. Economists were looking for a 2% increase for August.
Rest of Europe
UK annual inflation accelerated again in September to the highest since records began in January 1997. Higher gas and electricity costs have pushed inflation to above 5%, official data showed. The Office for National Statistics said in its report that UK's annual inflation increased to 5.2% in September from 4.7% in August. September inflation exceeded economists' expectations of a 5% rise. In September, the monthly inflation stood at 0.5%, slightly slower than August's 0.6%. However, monthly inflation stood above 0.4% expected by economists.
Meanwhile, the all items retail prices index or RPI rose 5% annually, up from 4.8% in August. The RPI climbed to 218.4 from 217.2 in August, showing a monthly growth of 0.6%. Economists were looking for 4.9% annual increase and a 0.6% rise on a monthly basis. Excluding mortgage interest payments, retail prices rose at a faster pace of 5.5% in September compared to a 5.2% rise in the previous month.
Elsewhere, the Department of Communities and Local Government, or DCLG, said its house price index for the UK fell 3.4% year-on-year in August, much faster than a 0.3% fall seen in July.
Hungary's consumer prices increased 5.7% year-on-year in September compared with a 6.5% rise in August, a report by the Hungarian Statistical Office said. Economists were looking for an increase of 6.1%. On a monthly basis, consumer prices remained unchanged in September, after declining 0.3% in August. In September, the harmonized consumer prices rose 5.6% year-on-year in September, while it fell 0.1% month-on-month. Meanwhile, the core inflation was a seasonally adjusted 5% on an annual basis in September.
According to the Czech Statistical Office, industrial producer prices index, or PPI increased 5.5% year-over-year in September, smaller than the 5.7% recorded in August. Economists' consensus was for a 5.7% rise in September. On a monthly basis, the industrial PPI decreased 0.1% in September, in contrast to the 0.4% rise seen in the prior month.
Separately, the Czech statistical office said that export prices declined annually for the tenth month in a row, falling 5.7% in August, after a 9.3% drop in July. In August, import prices dropped 3.5% over a year ago, compared with the 6.8% fall recorded in the prior month. On a monthly basis, export prices increased 2.8% in August, due to the weakening of the Koruna. At the same time, import prices climbed 2.4%.
Croatia's consumer prices rose 6.4% year-on-year in September, a report by the Croatian Bureau of Statistics said. Inflation slowed from 7.4% logged in August and equaled May's number. On a monthly basis, consumer prices were up 0.2% in September, after registering a 0.3% decline in August.
The Lithuanian Finance Ministry lowered the growth forecast for 2009 to 1.5% from 4.5%. The growth projection for 2008 was maintained at 5.3%. On the inflation front, the Ministry now sees the harmonized CPI annual inflation at 10.3% for December, up from its earlier forecast of 6.8%. The annual average inflation is expected to be 11.4% this year, up from the earlier projection of 9.2%. The inflation outlook for 2009 was raised to 5.4% from 5.1%, while the forecast for 2010 was maintained at 3.6%.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.