August 2, 2018 / 9:30 AM / 2 months ago

More expensive energy lifts euro zone producer prices in June

BRUSSELS (Reuters) - Euro zone producer prices rose more than expected in June, data showed on Thursday, lifted mainly by more expensive energy.

FILE PHOTO: A seller offers some oranges at the wholesale fruits and vegetables market in Hamburg Germany March 13, 2018. REUTERS/Fabian Bimmer

The European Union’s statistics office Eurostat said prices at factory gates in the 19 countries sharing the euro rose 0.4 percent month-on-month in June against market expectations of a 0.3 percent rise in a Reuters poll of economists.

Year-on-year, producer prices rose 3.6 percent in June, against market expectations of a 3.5 percent gain.

Energy prices rose 1.1 percent on the month and were 9.5 percent higher than a year earlier, making energy the biggest variable in the overall index.

Without the volatile energy, producer prices rose only 0.2 percent month-on-month and 1.6 percent year-on-year.

Prices at factory gates herald trends in consumer inflation because unless absorbed by intermediaries or retailers, higher producer costs translate directly into higher consumer prices.

The European Central Bank wants to keep consumer inflation below, but close to 2 percent over the medium term. An early Eurostat estimate showed on Wednesday that in July, consumer inflation was 2.1 percent year-on-year.

Reporting By Jan Strupczewski

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