EU to Report on Consumer Prices
The European Union will report Friday on consumer prices in July within the dozen countries sharing the euro.
Economists expect prices to have fallen last month, thereby giving the European Central Bank more room to lower interest rates for the second time this year.
Prices probably declined 0.1% in July, cutting the annual inflation rate to 2.8%, down from 3% in June.
Slowing economic growth and layoffs at companies such as BASF, Europe’s largest chemicals maker, are putting pressure on the central bank to reduce borrowing costs. Last week the ECB signaled it may lower its main interest rate from 4.5% as soon as an Aug. 30 policy meeting.
Policymakers at the ECB have resisted calls to lower interest rates again because inflation has been above the central bank’s 2% goal for the last 13 months, reaching a high of 3.4% in May.
The ECB said last week economic growth was below expectations in the first half and that forecasts for the full year would have to be revised.
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