German and Spanish inflation rises less than expected in April

{"text":[[{"start":9.95,"text":"Inflation in Germany and Spain rose less than expected in April, strengthening the case for the European Central Bank to postpone potential increases in interest rates until June at the earliest."}],[{"start":22.2,"text":"In Germany, the Eurozone’s biggest economy, annual inflation rose to 2.9 per cent from 2.8 per cent in March but the figure was below the 3.1 per cent expected by economists polled by Reuters."}],[{"start":35.9,"text":"In Spain, the Eurozone’s fourth-largest member, annual inflation dipped to 3.2 per cent from 3.4 per cent in March. "}],[{"start":44.849999999999994,"text":"Economists had warned that higher energy prices driven by the Middle East conflict would drive up inflation in the bloc. "}],[{"start":null,"text":"

"}],[{"start":51.949999999999996,"text":"The Spanish government attributed the fall in its inflation rate to a €5bn package of energy tax cuts it introduced following the outbreak of the Iran war to damp the impact of rising fuel prices for consumers."}],[{"start":65.39999999999999,"text":"Timo Klein, economist at S&P Global Market Intelligence, said the inflation data reinforced his view that the ECB would need to tighten monetary policy “modestly by mid-year, with a move in June more likely than at their next meeting on April 30”."}],[{"start":80.94999999999999,"text":"Ulrich Kater, chief economist of German lender DekaBank, said that as long as shipping through the Strait of Hormuz remained disrupted, inflationary pressure would rise “slowly but steadily”. "}],[{"start":92.69999999999999,"text":"A fifth of the world’s oil passed through the strait prior to the war. It was also a vital trade route for a host of other commodities from aluminium to sulphur."}],[{"start":102.85,"text":"Investors and economists expect the ECB to leave interest rates unchanged when it next sets monetary policy on Thursday, but to increase them later this year, potentially as early as June. "}],[{"start":114.6,"text":"Financial markets are currently pricing in three quarter-point rises in interest rates by the end of the year, according to Reuters data. "}],[{"start":122,"text":"That would lift the ECB’s key deposit rate to 2.75 per cent, the highest level since February 2025. "}],[{"start":130.95,"text":"Excluding highly volatile prices for food and energy, core inflation in Germany came down from 2.5 per cent in March to 2.3 per cent this month. The surge in the headline inflation rate was driven by a 10.1 per cent annual rise in energy prices, the largest increase in three years. "}],[{"start":150.14999999999998,"text":"“Noticeable second-round effects, in which higher energy prices spill over into other goods, have so far failed to materialise,” said Michael Herzum, economist at asset manager Union Investment. "}],[{"start":161.89999999999998,"text":"Temporary cuts in fuel tax in Germany that will start in May “should also dampen inflation somewhat”, he added."}],[{"start":168.29999999999998,"text":"“The energy price shock is hefty, but its impact on overall inflation has so far been limited,” said Silke Tober, an economist at German economic think-tank IMK."}],[{"start":180.2,"text":"Inflation across the Eurozone’s 21 member states, which will be published by Eurostat hours before the ECB decision on Thursday, is expected to rise by 0.3 percentage points to 2.9 per cent in April. "}],[{"start":193.39999999999998,"text":"Eurostat will also publish its estimate of Eurozone GDP growth for the first quarter, with economists expecting the economy to have expanded by 0.2 per cent compared with the final three months of 2025."}],[{"start":206.09999999999997,"text":"Data visualisation by Janina Conboye"}],[{"start":214.59999999999997,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1777514405_4052.mp3"}