US government data on Wednesday showed a steep, faster-than-expected rise in the consumer price index in June compared to May. The increase was driven by significant increases in gasoline prices.

The Bureau of Labour Statistics said prices, which include food, gasoline and housing, were up 1.3 per cent in June compared to May. This number is also considered to be a substantial jump, following increases in the preceding months that are having a negative impact on the household budgets of millions of American families.

With the higher-than-anticipated monthly surge, the annual rate of consumer price growth accelerated to 9.1 per cent in June, the biggest increase since November 1981.

The Federal Reserve is already engaged in the fastest series of interest rate hikes in three decades, hoping it will bring down inflation by curtailing borrowing and spending by consumers and businesses.

In the meantime, the eurozone industrial production increased by more than expected in May, as capital and non-durable consumer goods output increased sharply during the month, data published by Eurostat showed on Wednesday. Industrial output gained 0.8 per cent on month, faster than the 0.5 per cent increase registered in April. This was the second back-to-back monthly rise in production and also better than the expected growth of 0.3 per cent.

For the 27 countries that make up the European Union, industrial production notched up by 0.6 per cent on the month in May and advanced 2.7 per cent annually. Among member states, the highest monthly increase was seen in Ireland, up 13.9 per cent, whereas Lithuania reported the biggest fall of 7.6 per cent.

Finally, expectations for economic growth in Germany tanked in July, falling even slightly below the pandemic levels, data from the ZEW economic research institute showed on Tuesday. The ZEW economic sentiment index plummeted to -53.8 points in July from -28.0 in June. The July figure is a touch below the reading seen in March 2020, when Germany saw its first pandemic-related closures.

The survey, which is conducted among professional economists rather than businesses, is the first since Russia started curtailing gas supplies to Germany, its largest customer, as a means of exerting political pressure.

“Expectations for energy-intensive and export-oriented sectors of the economy have fallen particularly sharply and private consumption is also assessed as significantly weaker,” ZEW president Achim Wambach said.

This report was compiled by Bank of Valletta for general information purposes only.