Euro-zone Inflation at 2.5%; Swedish Home Prices Up 1%

Arthi Gupta
17 Aug, 2011
New York City

Euro area inflation eased to 2.5%, Swedish home prices rose, and Austria annual inflation climbed in July. Euro-zone and Italy current account deficit widened in June. Iceland hiked rates by 25 basis points to 4.50%.

[R]2:00 PM Frankfurt – Euro area inflation eased to 2.5%, Swedish home prices rose, and Austria annual inflation climbed in July. Euro-zone and Italy current account deficit widened in June. Iceland hiked rates by 25 basis points to 4.50%.[/R]

Euro-zone Inflation Eases, Deficit Widens

Euro-zone annual inflation eased to 2.5% in July, as estimated initially, from 2.7% in June, according to data released by Eurostat today. However, it continues to stay above the 2% target.

On a monthly comparison, consumer prices declined 0.6% in July.

Core inflation that excludes energy, food, alcohol and tobacco prices, slowed to 1.2% in July from 1.6% in June.

Euro-zone current account deficit widened to a seasonally adjusted €7.4 billion in June from €3.1 billion in June last year, the European Central Bank said.

The surplus on goods account fell to €0.6 billion in June from €3.1 billion in May and the surplus in trade in services rose to €4.4 billion in June from €4.2 billion in May.

The shortfall in current transfers widened to €10.8 billion in June from €8.8 billion in May.

Italy Deficit Widens

Italy''s current account deficit widened to €4.25 billion in June from €4.15 billion in the same month last year, data released by the Bank of Italy showed on Wednesday.

The shortfall on the current transfers account narrowed to €1.01 billion from €1.14 billion a year earlier.

Iceland Lifts Rates

Iceland''s central bank increased interest rates on Wednesday and hinted more rate hikes for future on higher inflation outlook.

The Sedlabanki raised the seven-day collateralized lending rate by 25 basis points to 4.50%. The current account rate was hiked to 3.5% and the maximum rate on 28-day certificates of deposit to 4.25% and the overnight lending rate was lifted to 5.5%.

Swedish Home Prices Up

Sweden''s home prices of one-or two-dwelling buildings increased 1% on a monthly basis in July, after remaining flat in the previous two months, according to data released by Statistics Sweden today.

The average price for one house in Sweden declined to SEK 2.03 million in July from SEK 2.10 million in June. The number of purchases fell to 4256 in July from 4852 in June.

Austria Annual Inflation Rises

Austria''s consumer price inflation increased to 3.5% in July from 3.3% in June, data released by Statistics Austria showed. The July figure was the highest since September 2008.

On a monthly comparison, consumer prices fell 0.2% in July, after remaining flat in June.