ROUNDUP/USA: Inflation rises to the highest level in over 40 years
WASHINGTON – US inflation rose to its highest level in more than 40 years in May. Consumer prices rose by 8.6 percent year-on-year, the Department of Labor announced on Friday in Washington. This is the highest level since December 1981. Economists, on the other hand, had expected inflation to remain unchanged at 8.3 percent.
USA: Michigan consumer sentiment falls to record low
MICHIGAN – US consumer sentiment fell to a record low in June, weighed down by high inflation. The consumer climate surveyed by the University of Michigan fell by 8.2 points to 50.2 points compared to the previous month, as the university announced on Friday after a first round of surveys. This is the lowest value ever measured. On average, economists had expected a slight decline to 58.1 points.
The Russian central bank cuts interest rates again
MOSCOW – The Russian central bank has its own monetary policy eased again despite ongoing sanctions against the country. The central bank announced on Friday in Moscow that the key interest rate would be reduced by 1.5 percentage points to 9.5 percent. Economists had, on average, with a slightly less clear rate cut calculated at 10.0 percent. It is the fourth rate cut in a row. The central bank announced further cuts this year.
ROUNDUP/zdemir in Kyiv: solidarity for agriculture in Ukraine
Kyiv – German Agriculture Minister Cem zdemir has pledged German support to Ukraine to maintain its agriculture and grain exports in the ongoing Russian war. “The success of Ukrainian agriculture is not only important for Ukraine, it is important for all of us,” said the Green politician on Friday during a visit to an agricultural college in Nemishayev near Kyiv. The trip was also about alternative routes for exports from the country to global food security in view of blocked ports. Specifically, Germany wants to help with money for veterinary medicines, among other things.
ROUNDUP/union and association: Wissing slows down at the Germany clock
BERLIN – Federal Minister of Transport Volker Wissing (FDP) brakes from the point of view of the industry and associations at the Germany cycle in rail traffic. “There is a standstill in the implementation of the central future project Deutschlandtakt,” said Hans Leister, board member of the Allianz pro Schiene interest group, on Friday. The infrastructure measures planned for the 2030 target timetable are “all on hold”. “Not a single project has been specified by the ministry in such a way that implementation can begin.”
Bundesbank: Inflation expectations in Germany rise to seven percent
FRANKFURT – The inflation expectations of private households in Germany have risen further. According to new data from the Bundesbank, the expected inflation for the next twelve months rose from 6.9 percent in the previous month to 7.0 percent in May. This means that the expected inflation has more than doubled year-on-year. It is also the highest value since the survey began in 2019. The average inflation rate expected over the next five years rose from 5.2 to 5.3 percent.
Italy: Industrial production rises surprisingly
ROME – Industry in Italy surprisingly increased production in April. Total production rose by 1.6 percent compared to the previous month, as the statistics office Istat announced in Rome on Friday. Economists, on the other hand, had expected a decline of 1.1 percent. It is the third increase in production in a row.
Inflation rises to 16 percent in the Czech Republic
PRAGUE – In the Czech Republic, consumer prices continue to rise at a rapid pace. The annual inflation rate climbed to 16 percent in May, the national statistics agency CSU announced on Friday. That was the highest since December 1993, when inflation was 18.2 percent. The most recent increase was therefore primarily driven by rising housing costs and the prices for food, combustibles and motor fuels. The development was particularly strong for flour, which cost 64.6 percent more than a year ago, and for butter, which increased by 51.9 percent.
Ifo: shortage of materials in construction at a record level – prices are rising
MNICH – The shortage of materials in construction is worse than it has been for at least 31 years. In building construction, the proportion of companies that reported shortages in a survey by the Ifo Institute increased by 2.4 points to 56.6 percent, as the Munich economic researchers reported on Friday. This is the highest value since the survey began in 1991. In civil engineering, the share fell minimally to 44.8 percent – the second highest value ever determined here.
Bundesbank expects inflation of more than 7 percent and weaker growth
FRANKFURT – According to estimates by the Bundesbank, the consequences of the Ukraine war are slowing down economic growth in Germany and driving up inflation. With growth of 1.9 percent, the economic recovery after the Corona low should continue, as the Bundesbank forecast on Friday. In December, however, the central bank still assumed that real gross domestic product (GDP) would increase by 4.2 percent in 2022.
Lindner plans tax breaks for real estate buyers
BERLIN – Federal Finance Minister Christian Lindner (FDP) is aiming for tax breaks for real estate buyers. A new opening clause should give the federal states more design options for real estate transfer tax and even reduce the tax rate to zero. This emerges from a paper from the ministry, which was sent to the federal states according to the “Handelsblatt” (Friday) and which is also available to the German Press Agency.
Resistance to push for excess profits tax
BERLIN – A push by the states of Bremen, Berlin and Thuringia for a special tax on high additional profits from companies as a result of the Ukraine war is met with resistance – in the Bundesrat itself and in the Federal Ministry of Finance. Such a “surplus tax” would be the “wrong way” and “not a good idea,” said Secretary of State for Finance Katja Hessel (FDP) on Friday when deliberating on the application in the state chamber. “Such a tax would be economically counterproductive, legally problematic and certainly not quick to implement.”
Customer Note:
ROUNDUP: You are reading a summary in the business cycle overview. There are several reports on the dpa-AFX news service on this subject.
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