Eurozone Producer Prices Spiked in July

Eurozone producer prices marginally increased higher than the forecast in July because of higher energy costs as reported by the European Union statistics agency on the data recently released on Tuesday.  

The euro currency grew by 0.4 percent month-on-month in July compared to the previous 0.3 percent increase on the poll by Reuters, while Eurostat shows factory in 19 countries.  

Producer prices grew by 4.0 percent on year-on-year basis in July compared to the 3.9 percent gain.

Meanwhile, energy costs increase to 1.1 percent on the same period compared to 10.7 percent in twelve months earlier, which was considered as the biggest variable in the index as a whole.

On the PPI data, excluding volatile energy, a growth of 0.1 percent was recorded month-on-month and 1.7 percent year-on-year according to the European Central Bank chief Mario Draghi where the spike of energy prices mainly influenced higher inflation.

Factory prices influenced consumer inflation unless intermediaries and retailers draw the changes in, this would highly affect consumer prices due to higher producer costs.

The European Central Bank intends to maintain the consumer inflation below but still around 2 percent in medium-term. The previous statistics of Eurostat showed last week the consumer inflation to be at 2.0 percent year-on-year for the month of August.