Spain, Barcelona, Mercat de Sant Antoni Market, fresh fruit vendor display. (Photo by: Jeff Greenberg/Education Images/Universal Images Group via Getty Images)
Jeff Greenberg | Universal Images Group | Getty Images
Euro zone inflation fell in July, and new growth figures showed economic activity picking up in the second quarter of this year — bringing some positive news to the region.
Headline inflation in the euro area was 5.3% in July, according to preliminary data released Monday, lower than the 5.5% registered in June. However, it remains well above the European Central Bank’s 2% target for the 20-member bloc.
The euro area has been battling high inflation for the past year, leading the ECB to undergo a full year of consecutive rate hikes in an effort to bring prices down. Last week, the central bank rose rates by a quarter percentage point once again, bringing its main interest rate to 3.75%.
The inflation figures come against a backdrop of previously moribund growth, with GDP (gross domestic product) stagnating in the first quarter of this year. However, a separate data release on Monday showed that growth accelerated in the second quarter, expanding by 0.3% — higher than the 0.2% expected.
Both France and Spain’s economies proved relatively resilient in the second quarter, with the former posting a GDP rate of 0.5% and the latter expanding by 0.4%.
Germany, however, proved weaker over the same three-month period, failing to post any growth.
This is a breaking news story and it is being updated.
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