Industrial production across the 17-member Eurozone countries rose in July. But rising energy prices also caused inflation to pick up in August. This means it’s less likely that the European Central Bank (ECB) will cut interest rates at its next meeting.
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The improvement in industrial output is an encouraging sign in what seems to be an otherwise softening economy.
It also signifies hope of further improvement since sales of factory equipment are to large developing economies where investment in business
is stronger than investment in currencies.
Investment in currencies was .6% higher in July than in June but it was 2.3% lower than in July of 2011.
Germany led the increase in output, comprising 1.3% of the total 2.4% increase in Eurozone capital goods. But rising inflation can hurt consumer spending. The annual inflation rate rose to 2.6% in July from 2.4%.
It’s expected the trend of rising inflation will be confirmed when official numbers are released on Friday.