Euro zone producer prices fall in July as expected
BRUSSELS (Reuters) - Euro zone industrial producer prices dropped as expected in July both on a monthly and on a yearly basis, data showed on Wednesday, as the increased cost of consumer goods was offset by declining energy prices.
The European Union's statistics office Eurostat said prices at factory gates in the 19 countries sharing the euro decreased 2.1 percent year-on-year in July, and declined slightly by 0.1 percent compared to June.
The data matched the forecasts of a Reuters poll.
Energy prices decreased by 0.5 percent month-on-month and were 6.5 percent lower than a year earlier. Prices of durable consumer goods used by factories increased 0.1 percent on a monthly basis and 0.9 percent year-on-year.
Excluding volatile energy prices, producer prices remained stable month-on-month in July and were 0.4 percent lower than a year earlier.
Prices charged by industrial producers are an early indication of consumer inflation trends, because increases translate into prices charged in shops, unless retailers or other intermediaries absorb rises through smaller profit margins to compete for customers.
The European Central Bank wants to keep inflation below, but close to 2 percent in annual terms over the medium term and is buying euro zone government bonds to inject more cash into the economy and accelerate price growth.
(Reporting by Francesco Guarascio, editing by Robin Emmott)
