German inflation unchanged at 2% in July
Annual inflation in Europe's top economy came in at 2%, according to preliminary data from federal statistics agency Destatis.
That was higher than the 1.8% expected by analysts polled by financial data firm FactSet.
Compared to the previous month, prices rose 0.3%, federal statistics office Destatis said.
Goods inflation notched up a small rise while services inflation slowed a little, Destatis said.
The inflation figure will reassure rate-setters at the European Central Bank that overall euro area inflation is on the right track.
Germany is the euro zone's largest economy by some distance, accounting for about a quarter of its GDP.
The ECB kept its key deposit rate unchanged at 2% at its last meeting in July, ending a streak of cuts stretching back to September 2024.
The central bank is widely expected to keep rates unchanged at its next meeting while euro zone inflation is around the ECB's 2% target.
Some analysts nevertheless see room for a possible September cut if tariffs imposed by US President Donald Trump end up cooling Europe's economy and causing cheap exports to be sent to the continent instead of the US.
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RTÉ News
10 hours ago
- RTÉ News
Can Trump's threatened tariffs make Russia end its war?
First it was 50 days. But that deadline hardly made the Kremlin blink. Then, earlier this week, US President Donald Trump gave Russia a new 10-day deadline to end its three-and-half-year war in Ukraine. It was a simple ultimatum from the US: sign up to a ceasefire agreement by next Friday or face 100% tariffs. A couple of weeks ago, the White House indicated that tariffs on Russia and its trading partners could be as high as 100%. Russian exports of oil and gas account for about 60% of the country's overall exports, according to various estimates. Given that the profits of Russian oil companies are taxed heavily by the Russian state, implementing such high tariffs would deny Russia much-needed revenue for its war in Ukraine. According to the Centre for Research on Energy and Clean Air, a Helsinki-based thinktank, Russia has made more than €920bn on exports of fossil fuels since the start of its full-scale invasion of Ukraine. Oil exports accounted for more than €630bn during that time. The Kremlin ignored Mr Trump's first 50-day ultimatum and has done the same with the new one, simply saying that the US president's comments were "noted". True to form, Russian President Vladimir Putin has not responded directly to Mr Trump's latest ultimatum to end the war. Russia's missile strikes on Ukrainian cities during this week have also indicated that Mr Trump's new deadline has not influenced Russia's war tactics. On Thursday, Russian strikes killed 31 people in Kyiv, including five children, and on Tuesday, Russian airstrikes on a prison and hospital in the Zaporizhzhia region killed 19 people. Russian forces are continuing their slow advance along the front, claiming to have captured Chasiv Yar on Thursday. Chasiv Yar is a strategically important but destroyed town in eastern Ukraine that has been fought over for 16 months. Ukraine denied that the town had been lost. If there are any moves inside the Kremlin towards agreeing a ceasefire deal by next Friday, then its leadership is hiding it very well indeed. During the week, Kremlin spokesperson Dmitry Peskov said Russia had "developed an immunity" to Western sanctions after years of being sanctioned, while other senior officials aired similar views. Many analysts agree that Russia's economy has largely weathered more than three years of Western penalties - actions that included sanctions on Russian banks, freezing their assets and excluding them from using the global system for international payments. The West also set a price cap in late 2022 of $60 per barrel on Russian maritime exports of oil. However, Russia has continued to export its oil to buyers from non-sanctioning countries through its so-called 'shadow fleet'. These are mostly aging tankers with opaque maritime histories, registered in third-party countries to circumvent sanctions. The EU's latest batch of sanctions last month - the 18th so far - aims to make it harder for Russia to transport its oil around the world by lowering the price cap to $47 per barrel and blacklisting more than 100 of the shadow fleet's vessels from docking at ports across the EU. So Mr Trump's threat to impose 100% tariffs on Russia and its trading partners is a novel move to reduce the Kremlin's ability to collect oil revenues and thereby dent its war chest. "If the US comes with secondary sanctions on Russian oil, I can't see a bolder play," Ben McWilliams, an energy expert at the Bruegel thinktank in Brussels, told RTÉ News. "It's playing all their cards and that's trying to exert maximum pressure on Russia through energy," Mr McWilliams added. China buys almost half of all Russian crude oil exports, followed closely by India. Turkey and the EU both account for about 6% each of total Russian oil exports - most Russian crude oil flowing into the EU is bought by Hungary and Slovakia via pipeline. Russia also sells smaller volumes of oil to other markets including Myanmar, Azerbaijan, Brazil, Pakistan and Venezuela. The loss of revenue from those smaller markets is surmountable for Russia. However, a reduction in Chinese or Indian imports of the commodity would deny the Kremlin vital revenue for its war. Last year, China's level of Russian crude oil imports reached a record high of 108 million tonnes, according to data from China's national customs authority. Those imports account for about 20% of all Chinese oil consumption and are estimated to be worth about $62bn in 2024, based on analysis by the Centre of Eastern Studies in Warsaw and MERICS, a Berlin-based thinktank that focuses on China. In April, after the Trump administration imposed 145% tariffs on Chinese imports, Beijing hit back with high 110% tariffs of its own on US goods. A truce has been in place between Washington and Beijing since May, with the US reducing its tariffs to 30% and China to 10%. Statements from senior Chinese officials earlier this week suggest Beijing is unlikely to yield to pressure from Washington to stop buying Russian oil. "China will take energy supply measures that are right for China based on our national interests," Guo Jiakun, spokesperson for China's foreign affairs ministry, told reporters. Tariff wars have no winners. Coercion and pressuring cannot solve problems," he added. India might be more likely to reconsider reducing the amount of Russian oil it buys, if faced with 100% tariffs. On Friday, the US hit India with 25% tariffs on its imported goods - just one of many countries whose goods are to be levied by the US as part of Mr Trump's plan to, as he sees it, address US trade imbalances with other countries. The $60 price cap in late 2022 drove down the price of Russian oil exports, leading India to buy up much larger quantities of the stuff than it did before the war - it now buys more than two million barrels of oil a day from Russia, equivalent to about 2% of the world's total supply. Russian crude oil now accounts for about 35% of India's oil imports. Those purchases were valued at an estimated $50bn last year, according to India's government data, sourced by Reuters. New Delhi's reaction to the 25% levies has been to engage in trade talks. Mr Trump has also threatened to impose additional economic penalties on India for trading with Russia. US Secretary of State Marco Rubio said this week that India's purchase of Russian oil was "a point of irritation" so it looks like the US sees India's heavy reliance on Russian oil as a deal breaker in their overall trade talks. A number of Indian state oil refineries stopped buying Russian oil in the past week, buying more oil from Gulf States instead, an indication that American pressure is working. Reduced oil exports to India would force Russia to find substitute markets to make up for the shortfall. "Russia could still manage to get many barrels to market. You could still imagine small markets, each taking 50,000 barrels or something," Mr McWilliams said. "The question would be, at what price," he added, pointing to the cheaper price that buyers from India and China paid for Russian oil after European demand all but disappeared in 2022. If India and another big economy such as Turkey stop buying Russian oil, then buyers in other markets might have more leverage to offer lower prices for Russian crude, he argued. Turkey is the world's largest importer of Russian oil products such as diesel, heating oil and jet fuel. However, Turkey has also played a key role recently in US efforts to broker a peace deal to end the war in Ukraine. Turkish diplomats have mediated three brief face-to-face meetings between Russian and Ukrainian negotiators in Istanbul since May. Unleashing 100% tariffs on Turkey for buying Russian oil would jeopardise Turkey's eagerness to work alongside the US as a mediator. Turkey, a NATO member, is also one of the few countries that Russia views as an acceptable mediator. Mr Trump's threat of 100% tariffs is unlikely to sway Russia to stop its war immediately, nor in the weeks ahead. The Kremlin has been quite clear that it plans to weather new sanctions. Imposing high tariffs on China for trading with Russia could also set off a new, all-out trade war between Beijing and Washington. But tariffs could force India and a number of other smaller economies that buy Russian oil imports to buy elsewhere and that lost revenue would dent the Russian state's war economy in the months ahead. The big unknown factors are whether Mr Trump will follow through on his tariff threats and whether Mr Putin might yet come up with a diplomatic ploy to delay them.
Irish Times
11 hours ago
- Irish Times
Is Trump's tariff plan working or is this the quiet before the storm?
Donald Trump and his economic advisers are said to feel vindicated. Bilateral trade deals are rolling in and, in the main, on more favourable terms for the US . Tariff revenue is soaring. Financial markets are fluctuating near record highs and predictions that inflation would soar have not yet materialised. Is this the quiet before the storm or is Trump's tariff plan, which nearly every mainstream economist says is destined to fail, succeeding? In truth no one knows but every data point is being picked over for clues. READ MORE The latest job figures from the US for July were weak and contained downward revisions from a previously announced levels, suggesting companies might 'already been pre-emptively slowing their hiring amid the uncertainty created by months of tariff threats and pauses from the White House', according to one report. US inflation, meanwhile, accelerated to 2.7 per cent in June without a commensurate increase in consumer spending, suggesting higher import prices from tariffs maybe fuelling prices. Federal Reserve chairman Jerome Powell has so far resisted lowering interest rates like the European Central Bank because of the US's strong labour market and the upside risks to inflation from tariffs, much to Trump's annoyance. Though concerning, the economic data don't exactly point to a big pivot in underlying performance and aren't likely to spook the White House just yet. But they do represent turbulence and remember much of the tariff impact has yet to play out. [ US tariffs will mean 70,000 fewer jobs created in Irish economy, Department of Finance warns Opens in new window ] There's a lag time before higher prices get passed on to businesses and consumers because of front-loading and other dynamics. Trump's first term in office did feature tariff threats but ones that met resistance from within the White House and which were eventually moderated. This time, it's different. Easy wins in trade negotiations with Britain, Europe and Japan has emboldened the president. Explaining the EU's quick capitulation, one insider said Germany, after enduring a gruelling energy price shock, 'wanted stability and didn't care what the price'. The average effective tariff rate on US imports is now at its highest level in nearly a century. Will it send the US economy into reverse or will Trump and Maga operatives muddle through?
Irish Independent
11 hours ago
- Irish Independent
The Sunday Independent's View: EU's supporters must examine why it is losing voters' trust
Beyond a few cranks, there is no real appetite for any form of 'Irexit'. Indeed, the most recent Eurobarometer survey, which tracks public opinion across the 27 member states, found that Ireland continues to share the highest level of trust in the EU's institutions, along with Poland. There are some clouds, nonetheless, on which political weather-watchers would do well to keep an eye, lest they rain on any future parade. On two key markers, those being the continuing nightmare in Gaza and the trade deal the EU concluded last week with US president Donald Trump, today's Sunday Independent/Ireland Thinks poll reveals growing angst at the direction being taken in Brussels. About seven in 10 respondents rate the EU's performance on Israel-Gaza as either bad or very bad. More than half (58pc) also regard the EU's performance on the tariff deal as bad or very bad. Dissatisfaction goes well beyond those two issues. On question after question, Irish voters give a resounding thumbs-down in this poll to the bloc's efforts to tackle problems they are facing every day, be it the cost of living (63pc take a negative view) or immigration (68pc negative, with 0pc rating the EU's performance as 'very good'). Overall, 63pc say their opinion of the EU is either somewhat or much disimproved since the start of the conflict in Gaza, up significantly from 51pc a year ago. These are remarkable figures in a country where there are rarely any stirrings of discontent at the EU, and fewer still since Brexit starkly demonstrated the perils of isolationism. There is no room in the Irish political marketplace for Euroscepticism It speaks of a lack of appreciation of the potential of conflict in Gaza to destabilise domestic politics in Europe. Add in the spanner that Trump has thrown into the works by strong-arming the EU into a trade deal that increasingly appears to represent a capitulation to US might, and the potential for further disruption is obvious. There is no room in the Irish political marketplace for Euroscepticism. Most of us recognise that EU membership has served us well. All the same, complacency must be avoided. Europe has always been able to hide its differences under a comfort blanket of economic stability. The current omnishambles of crises rocking trust in the EU has only been exacerbated since Trump came into office, as he lives up to his reputation as a Great Disruptor. The leverage he now exerts over our economic and political discourse may be uncomfortable for anyone who values democracy over dominance. A significant 77pc of people in our poll believe the EU should have been prepared to risk some disruption of its own by standing up to Trump more on tariffs. Doing so might even have been the making of the EU. Those who cherish the solidity provided by European solidarity must at least use the space provided by the US trade deal, imperfect as it is, to finally confront the bloc's internal divisions. It is these, rather than any malicious actions by the White House, that could prove its undoing. Paying humble attention to the disaffection indicated in our latest poll, rather than breathing a sigh of relief that it has not yet spilled over into more toxic forms of protest, would be a good start.
