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German inflation drops unexpectedly to 8.2 percent in June

FRANKFURT – German inflation eased to 8.2 percent in June from 8.7 percent in May, data released by the German statistics office showed Wednesday.

Analysts polled by Reuters ahead of the release had expected inflation to accelerate further to 8.8 percent.

The data will be welcome news to the European Central Bank in its battle against surging prices, especially after data released by Spain and Belgium earlier Wednesday showed inflation surging to double digits in both countries.

In Spain, the annual rate of inflation, harmonized for European statistical purposes, rose to 10 percent in June from 8.5 percent in May, beating expectations by a full percentage point. Underlying inflation, which strips out volatile components like energy and food prices, also accelerated significantly to 5.5 percent from 4.9 percent in the previous month.

In Belgium, the first inflation estimates showed that consumer prices rose to 10.5 percent in June from 9.9 percent in May, according to the European harmonized index. Underlying price pressure continued to strengthen as well, with core inflation accelerating to 5.1 percent in June from 4.4 percent in May.

Eurozone inflation data is scheduled to be released Friday. Ahead of Wednesday’s releases of national data, a Reuters survey of analysts saw prices accelerate to 8.4 percent, up from 8.1 percent previously. Commerzbank economist Marco Wagner said that a downside surprise in Germany, coupled with the upside surprise in Spain, means he’ll leave his forecast unchanged at 8.4 percent.

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