Inflation is moving in different directions in Europe. It hit 6.8% in Germany and 1.6% in Spain

Inflation is pushing in different directions in Europe, rising in Germany and falling again in Spain

Europe Central Bank Forum (Copyright 2023 The Associated Press. All rights reserved.)

Inflation is pushing in different directions in Europe, rising in Germany and falling again in Spain, official figures said Thursday.

German consumer prices jumped 6.8% in June from a year earlier, up from May’s 6.3%, the state statistics office Destatis said. The figure was boosted in part by a widely used offer of cheap transport tickets last summer, analysts said.

The increase in Europe’s largest economy comes a day before the release of inflation figures for the entire 20-country area that uses the euro currency. Inflation in the eurozone has been falling from its peak of 10.6% in October, coming in at 6.1% in May.

But that is still far above the target of 2% set by the European Central Bank. ECB chief Christine Lagarde has warned inflation is persistent enough to warrant at least one more interest rate hike at the bank’s July 27 meeting.

Higher interest rates are central banks’ chief tool against inflation.

Meanwhile, lower food and energy inflation meant Spain’s consumer price index increased only 1.6% in June from a year earlier, down from 2.9% in May.

Adrian Prettejohn, Europe economist at Capital Economics, said the low Spanish rate was unlikely to influence ECB decision-making “as country-specific factors are taking Spanish inflation much lower than in other countries.”