Industrial producer prices in the eurozone are rising quickly even outside the energy sector, their traditional booster, reinforcing the case for the European Central Bank to increase interest rates further.
European Union statistical agency Eurostat said on Monday the 12-nation currency area's producer prices gained 0.6 percent in July from June as expected for an annual rise of 5.9 percent. Excluding energy, producer price inflation accelerated to 3.4 percent in July from 3.0 percent in June, marking its fastest annual increase since November 1995.
Eurostat has estimated the eurozone's consumer inflation at 2.3 percent in August, down from 2.4 percent in July. Eurostat revised up June's producer prices index to a gain of 0.3 percent month-on-month from a previous reading of 0.2 percent. It left the annual June figure unchanged at an increase of 5.8 percent.
Unless absorbed by intermediaries, producer price rises are eventually passed on to consumers. That in turn raises headline inflation, which the ECB wants to keep below but close to 2.0 percent. Eurostat said July prices in the energy sector increased 1.8 percent month-on-month for an annual rise of 15.0 percent.
Intermediate goods prices inflation continued to accelerate to 6.0 percent year-on-year from 5.3 percent - the highest since September 1995.
Eurostat said prices of durable consumer goods rose 0.2 percent in July month-on-month, after falling 0.1 percent in June, and that they increased 1.8 percent in annual terms. Prices of capital goods were up 0.1 percent from June while non-durable consumer goods remained unchanged. In the whole 25-nation EU, producer prices rose 0.7 percent month-on-month and 6.4 percent year-on-year.
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