---
title: "Driven by the rise in energy costs, the Eurozone's PPI in July accelerated to 0.8% month-on-month"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/213415762.md"
description: "Eurozone's July PPI fell by 2.1% year-on-year. Energy was the main driver of price increases, with energy prices soaring by 2.8% month-on-month, while prices in other sectors fluctuated less. The European Central Bank will hold a monetary policy meeting on September 11-12, with widespread expectations that, following the first rate cut in June, the ECB will once again lower borrowing costs"
datetime: "2024-09-04T10:16:30.000Z"
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  - [en](https://longbridge.com/en/news/213415762.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/213415762.md)
---

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# Driven by the rise in energy costs, the Eurozone's PPI in July accelerated to 0.8% month-on-month

Driven by the rise in energy costs, the Eurozone's PPI accelerated on a month-on-month basis in July, with a narrower year-on-year decline, both exceeding market expectations.

On Wednesday, September 4th, Eurostat announced that the Eurozone's PPI in July fell by 2.1% year-on-year, slightly better than the expected 2.5% decline and the previous decline of 3.2%. It also increased by 0.8% on a month-on-month basis, higher than the expected 0.3% and the previous 0.5%.

The European Central Bank will hold a monetary policy meeting on September 11-12. Despite the fluctuating downward trend in inflation, it is widely expected that after the first rate cut in June, the ECB will once again lower borrowing costs.

## Energy prices surged by 2.8% on a month-on-month basis, while other sectors had smaller price fluctuations

**Energy was the main driver of the price increase, with energy prices surging by 2.8% this month, while prices in other sectors had smaller fluctuations.** Excluding energy, the PPI rose by 0.2% year-on-year and decreased by 0.1% month-on-month.

Following the data release, the euro to dollar exchange rate remained relatively stable at 1.1054 euros.

**On a month-on-month basis,** energy prices increased by 2.8%, while the PPI excluding energy decreased by 0.1%. Prices for intermediate goods, durable consumer goods, and non-durable consumer goods all decreased by 0.1%, while prices for capital goods remained unchanged.

Among EU countries, Bulgaria (+3.6%), Greece (+2.9%), and Romania (+2.7%) saw the highest monthly increases, while Sweden (-0.9%), Finland (-0.7%), and Austria (-0.2%) experienced the largest declines.

**On a year-on-year basis,** in July, energy prices in the Eurozone fell by 6.9%, showing a narrower decline compared to the 9.4% drop in the previous month. Excluding energy, the PPI rose by 0.2%. Prices for capital goods, durable consumer goods, and non-durable consumer goods increased by 1.4%, 0.3%, and 1.0% respectively, while prices for intermediate goods decreased by 1.2% 
Among EU countries, Slovakia (-18.9%), Luxembourg (-6.7%), and Latvia (-6.0%) experienced the largest declines, while Ireland (+6.1%), Romania (+2.7%), and Portugal (+2.0%) saw the highest increases.

## With the interest rate meeting approaching, will the ECB cut rates this time?

The Eurozone's August Harmonized CPI was reported to have risen by 2.2% year-on-year, with the inflation rate falling to a three-year low; service sector inflation remains stubborn, rising to 4.2%, reaching the highest level since October last year. Food and tobacco prices rose by 2.4%, non-energy industrial product prices rose by 0.4%, and energy prices fell by 3.0%. The core inflation rate, excluding energy, food, and tobacco prices, was 2.8%.

The European Central Bank will hold an interest rate meeting on September 11-12, with widespread expectations that, following the first rate cut in June, the ECB will once again reduce borrowing costs.

ECB Executive Board member Piero Cipollone believes that the central bank should not keep interest rates high for too long, as this could harm the economy.

> The data so far confirms our direction, and I hope this data will allow us to continue reducing the restrictiveness of our policies.

ECB Governing Council member Yannis Stournaras published a commentary in the Greek financial newspaper Imerisia, stating that even with further rate cuts, monetary policy "will remain restrictive."

He stated that decisions will continue to be made based on existing data, with all the latest information being assessed at each meeting.

> Against the backdrop of increasing economic and geopolitical uncertainties, we will continue to act cautiously, remain vigilant, adjust the direction of monetary policy appropriately when necessary, and gradually lower interest rates

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