Cairo: Spain’s industrial prices rose 43.2 percent year-on-year, down from 43.6 percent in May; Japan’s central bank agreed on the need for lower rates; South Korea’s economy shows signs of unexpectedly higher rate hikes, while England’s central bank is expected to increase its rates by a modest 25 bps on August 4.
Spanish industrial prices up 43.2 percent
Spain’s 12-month industrial price growth slowed for the third straight month in June as energy inflation slowed again, the National Statistics Institute said on Tuesday.
Spain’s industrial prices rose 43.2 percent in the 12 months to June, down slightly from 43.6 percent for the May period. INE reported that overall industrial prices rose 1.9 percent in June.
Inflation in the 12-month price of industrial output reached an all-time record of 47 per cent in the March period.
BOJ agrees on the need for lower rates
Policymakers at the Bank of Japan see wage hikes as the key to permanently achieving their 2 percent inflation target, minutes from the June meeting showed, keeping interest rates ultra-low despite mounting signs of price pressure. Underlined the Bank’s resolve to keep
According to minutes released on Tuesday, some of the nine-member board saw a rise in prices and a change in long-standing public perceptions that inflation and wages will not rise much in the future.
But members agreed that the economy needs massive monetary support to keep up with rising commodity prices and supply disruptions caused by China’s COVID-19 lockdown.
“The Board agreed that the uncertainty surrounding Japan’s economy was too high,” the minutes showed.
South Korea’s economy boomed unexpectedly
South Korean economic growth unexpectedly picked up in the second quarter as strong consumption over easing COVID-19 restrictions offset poor exports, leading to further hikes in central bank interest rates.
GDP for the April-June period grew 0.7 percent quarter-on-quarter, according to Bank of Korea estimates released on Tuesday, faster than the 0.6 percent growth in the first quarter and 0.4 percent in a Reuters survey. was more than growth. ,
Economists said the upbeat data allowed the central bank to continue tougher policy in the coming months, which delivered an unprecedented 50 basis-point rate hike this month.
Chun Kyu-yeon, an economist at Hana Financial Investments, said: “The economy will inevitably slow down due to prolonged inflation and cold exports, but today’s solid reading is a nice boost for the central bank, keeping inflation at bay for now.” Considering it as the major risk.”
Bank of England to increase rates by 25 bps on August 4
The Bank of England will shy away from a large interest rate hike in August and instead stick to a modest 25 basis points increase, but it is a very close call, a Reuters poll of economists found.
The BoE is battling four decades of high inflation, driven largely by global pressures related to supply-chain disruptions and higher energy prices. This has become a cost of living crisis, which is now increasing the likelihood of a recession.
Britain’s central bank was the first of its major peers to start hiking rates in the current cycle, raising the bank rate five times since the pandemic to 0.10 per cent since December which currently sits at 1.25 per cent.
(with input from Reuters)