Factory Price Growth In Germany Falls

Factory price inflation in Germany, one of the Eurozone’s major driving forces in economic terms, is down to its lowest rate in over three years, according to figures released today.

The figures released by the Federal Statistics Office showed a fall in price inflation at factories, which analysts have attributed largely to a decrease in the cost of fuel through lower crude oil prices.

After a week of disappointment for the Eurozone, with both France and Germany adding to Italy’s collection of poor results, today’s news is being well received as a sign of control in the powerhouse economy.

Furthermore, with poor growth forecast, and the ongoing credit saga across the pond, trading in European securities had been significantly down over the course of this week and last.

Inflation of the price of manufacturing was up by 1.1% on the year in July, compared to 1.7% on the year on June, whilst energy prices fell by 2.8% on the year.

The price of oil had fallen by 2.6%, due to a combination of naturally falling prices and a strengthening Euro, making imports from foreign nations more affordable, despite its balanced negative effect on domestic exports.

Today’s news was well received on the stock market, with the announcement that the inflation rate had fallen to its lowest in over three years.

With the cost of energy stripped from the equation, producer price inflation for the year on July was calculated at 2.4%, reflecting the degree to which falling power costs have impacted upon price inflation.

The DAX gained 108.22 points over the day, despite poor trading over the course of the morning. Combined with positive trading on American markets, the fall in factory price inflation helped turnaround the stock exchange after a disastrous week all round for the Eurozone and the European economy.

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