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Germany Inflation Unexpectedly Moderates From Record High

Germany's consumer price inflation unexpectedly slowed in June from a record high, preliminary data from Destatis showed on Wednesday.

Consumer price inflation eased to 7.6 percent in June from 7.9 percent in May. The rate was expected to rise to a new record 8.0 percent.

Similarly, the EU measure of inflation, or HICP, slowed to 8.2 percent from 8.7 percent in May. Economists had forecast the rate to advance to 8.8 percent.

Energy prices advanced 38.0 percent from the previous year, similar to the rates seen in the previous months. Food prices also increased at an above-average pace of 12.7 percent in June.

The consumer price index gained only 0.1 percent in June from May. Economists had forecast the monthly rate to ease to 0.3 percent from 0.9 percent in May.

The harmonized index of consumer prices fell 0.1 percent month-on-month in June, in contrast to the 1.1 percent increase in May. Prices were forecast to climb 0.4 percent.

The statistical office is scheduled to issue the final results on July 13.

The drop in headline inflation is mainly the result of the government's energy relief package which became effective on June 1, ING economist Carsten Brzeski said.

"This is not a turning point - yet - but rather evidence that it is currently governments and not central banks that can bring down inflation," said Brzeski.

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