Tags: Europe | Inflation | Slows | First | Time | 8 | Months

Europe Producer-Price Inflation Slows for First Time in 8 Months

Monday, 06 Jun 2011 10:21 AM

European producer-price inflation slowed for the first time in eight months in April on weaker cost increases for intermediate goods as the European Central Bank prepares to keep borrowing costs on hold.

Factory-gate prices in the euro region gained 6.7 percent from a year earlier after increasing a revised 6.8 percent in March, the European Union’s statistics office in Luxembourg said today. That’s the first decline since August. Economists had projected an increase of 6.6 percent last month, according to the median of 21 estimates in a Bloomberg news survey. From the prior month, prices advanced 0.9 percent in April.

Crude-oil prices have retreated 8.7 percent over the past two months to below $100 a barrel, easing pressure on companies to pass on higher costs to protect earnings. With euro-area growth faltering and governments struggling to contain a debt crisis, the ECB has signaled it will keep its benchmark interest rate at 1.25 percent when Governing Council members meet on June 9.

Energy prices at the producer level jumped 13.3 percent from a year earlier last month after a 13.1 percent gain in March, today’s report showed. The cost of intermediate goods rose 7.3 percent, down from an 8 percent increase in the previous month, while capital goods were 1.3 percent more expensive in April.

The statistics office had previously reported an annual gain in overall producer prices of 6.7 percent for March.

The ECB will release its latest economic forecasts on June 9. The Frankfurt-based central bank, which in March forecast inflation to average 2.3 percent this year and 1.7 percent in 2012, may raise borrowing costs in July to fight price pressures, according to a Bloomberg survey of economists.

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European producer-price inflation slowed for the first time in eight months in April on weaker cost increases for intermediate goods as the European Central Bank prepares to keep borrowing costs on hold.Factory-gate prices in the euro region gained 6.7 percent from a year...
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2011-21-06
Monday, 06 Jun 2011 10:21 AM
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