German inflation falls to 4.5%; UK home sellers increase discounts; mortgage rates ease business live

From 1h ago 08.07 EDT German inflation falls to lowest since February 2022 Just in: Inflation in Germany has fallen to its lowest level since Russia’s full-scale invasion of Ukraine last year. The inflation rate in Germany is expected to be 4.5% in September, statistics body Destatis has reported, down from 6.1% in August. The last time Germany’s inflation rate was lower than this was in February 2022 – the month the war began - when it stood at 4.3%. Food prices were 7.5% higher than a year ago, but energy prices were only 1% higher. Core inflation (which strips out food and energy) is expected to have fallen to +4.6%, from 5.5% in August.
Updated at 08.18 EDT
22m ago 08.51 EDT New data has confirmed that the US economy expanded at an annual rate of 2.1% in the second quarter of 2023. Economists had expected a small rise, to 2.2%. However, upward revisions to nonresidential fixed investment, exports, and inventory investment were wiped out by a downward revision to consumer spending. John Leiper, chief investment oficer at Titan Asset Management, says interest rate increases have hit consumer spending: “No major changes to the headline GDP number, in line with last quarter and slightly below expectations. The key data reading for me is Q2 personal consumption which came in noticeably below expectations and the prior reading. It also marks the lowest rate of increase since Q2 2020. This data follows the weaker than expected consumer confidence report on Tuesday and contributes to a growing sense that the consumer, responsible for much of the US economy’s recent resilience, is starting to buckle under the weight of prior monetary tightening.”
49m ago 08.24 EDT This fall in German inflation may hearten the European Central Bank that its monetary tightening programme is working. Earlier this month the ECB lifted eurozone interest rates to record highs, pushing up its deposit rate for the 10th consecutive time, to 4%. German inflation out. Quite a big drop in core & service infl. Looks OK. But then again... Germany is the growth lagard nowadays.
Nonetheless we believe the ECB has no ned to do more. Perhaps it already did too much. #dkøko #dkfinans #ECB pic.twitter.com/Ir6msTeI7I — Frederik Engholm (@FrederikEngholm) September 28, 2023
55m ago 08.18 EDT Germany's #inflation softened more than estimated: Sep CPI slowed to 4.5% from 6.1% in Aug, slowest since Feb 2022 versus a 4.6% estimate. Core inflation, which excludes volatile food and energy prices, sank to 4.6% in Sep, from 5.5% in Aug, so core > headline inflation. pic.twitter.com/hCln6ZkZJn — Holger Zschaepitz (@Schuldensuehner) September 28, 2023
1h ago 08.07 EDT German inflation falls to lowest since February 2022 Just in: Inflation in Germany has fallen to its lowest level since Russia’s full-scale invasion of Ukraine last year. The inflation rate in Germany is expected to be 4.5% in September, statistics body Destatis has reported, down from 6.1% in August. The last time Germany’s inflation rate was lower than this was in February 2022 – the month the war began - when it stood at 4.3%. Food prices were 7.5% higher than a year ago, but energy prices were only 1% higher. Core inflation (which strips out food and energy) is expected to have fallen to +4.6%, from 5.5% in August.
Updated at 08.18 EDT
1h ago 07.54 EDT Investors are poised for the latet German inflation data, due in just a few minutes. But there’s already been encouraging news – inflation in the western German state of North Rhine Westphalia fell to 4.2% this month from 5.8% in August, data released this morning shows. That is “a huge move that will give the ECB confidence that its decision to all but declare an end to the tightening cycle a couple of weeks ago was correct,” says Craig Erlam, senior market analyst at OANDA. Inflation in the German state of North Rhine-Westphalia fell to 4.2% on the year in September from 5.9% in August, indicating a national figure roughly in line with forecasts https://t.co/ZEva5w86tl — Bloomberg Economics (@economics) September 28, 2023
2h ago 07.10 EDT Eurozone economic sentiment has fallen for a fifth consecutive month, new data shows, adding to concerns over Europe’s economy. Optimism in services, retail and amongst consumers slipped, but there was a pick-up among industrial companies, according to the European Commission’s monthly survey. The economic sentiment index fell to 93.3 points in September, down from 93.6 in August, but higher than economists expected. Euro-area economic confidence slowed for 5th month, further overshadowing the region’s outlook.
A sentiment gauge published by the European Commission slid to 93.3 in Sept, from a revised 93.6 a month earlier. Economists had predicted a bigger decline.https://t.co/FlPx0yBXrc pic.twitter.com/4kEPgrMRpf — Global Markets Observer (@GlobalMktObserv) September 28, 2023
2h ago 06.43 EDT Spending on petrol and diesel fell in the last week, as motorists were hit by higher prices at the pumps. The Office for National Statistics has reported that debit card spending on “automotive fuel” fell by 3 percentage points in the week to 24 September 2023. That is the fourth week-on-week decrease in a row, That came as average fuel prices increased by 2 percentage points in the week to 17 September 2023, the ninth consecutive week-on-week increase. Our latest economic activity and social change data shows @RevolutApp debit card spending on “automotive fuel” fell by 3 percentage points in the week to 24 September 2023 💳
This is the fourth consecutive week-on-week decrease.
➡️ https://t.co/NPe23mdkKb pic.twitter.com/aKXV8OdFQE — Office for National Statistics (ONS) (@ONS) September 28, 2023 Average fuel prices increased by 2 percentage points in the week to 17 September 2023 ⛽
This is the ninth consecutive week-on-week increase. pic.twitter.com/d7UY6mkrUb — Office for National Statistics (ONS) (@ONS) September 28, 2023
3h ago 06.32 EDT Today’s drop in average five-year fixed mortgage rates below 6% shows that the crisis in the market is “turning the corner”, says Myron Jobson, senior personal finance analyst at interactive investor: “Average mortgage rates continue to pare back from lofty heights seen in July following sizeable falls in inflation, which could mean that interest rates might not peak as high as feared. This is a confidence booster for those looking to take out a mortgage soon. The latest fall in rates is another sign that the mortgage crisis which has stopped many from participating in the property market this year is turning a corner. The metrics used to price fixed-rate deals give lenders the green light to lower the cost of fixed-rate mortgages in anticipation of a future where borrowing costs will be reduced. The burning question is, how low will mortgage rates go and how fast will they fall? “While the positive news on the mortgage front is welcome, the property market remains in a state of flux. Would-be buyers and homeowners alike still face much higher monthly repayments than previous years – and a return of ultra-low mortgage rates aren’t forthcoming. Falls in mortgage cost could also keep house prices elevated.”
3h ago 06.20 EDT The owner of discount retailer Poundland has lowered its profit outlook for the second time in less than three weeks. Pepco Group blamed an “increasingly challenging” trading environment in its core markets of Central and Eastern Europe. Executive chairman Andy Bond told analysts that a promotion of “Barbie” merchandise helped deliver good underlying sales growth in July, like-for-like sales in the main Pepco business were negative in August and further deteriorated in September. Bond also blamed a loss of focus from management. He took over running the company earlier this month after CEO Trevor Masters resigned.
3h ago 05.56 EDT The UK’s FTSE 100 index is also falling today, down 50 points or 0.65% at 7544 points. Housebuilder Barratt (-6.2%) are the top faller, while gambling groups Entain and Flutter are also in the fallers following 888 Holdings cutting its full-year guidance this morning. The pound, though, is finally rallying after six days of losses – it’s up half a cent at $1.219, up from six-months lows yesterday.
4h ago 05.25 EDT European stock markets hit six-month low European share values have dropped to their lowest level in six months. The Stoxx 600 index, which tracks companies across continental Europe and the UK, has fallen by almost 0.5% this morning to 444.7 points, the lowest since the end of March. The Stoxx 600 index over the last 12 months Photograph: Refinitiv Shares have been pulled down by a series of factors. One is concerns that interest rates will remain higher than hoped, with the US Federal Reserve likely to push through one more hike before the end of the year. There are fears that rising oil prices will push up inflation, with Brent Crude approaching $100 per barrel for the first time since last November. China’s faltering economic recovery, and fears of a US government shutdown this weekend, are also worrying investors. Weak European economic data has also hurt markets, including falls in German and French consumer confidence this week, with concerns that Germany’s economy will shrink this year (see earlier post).
Updated at 05.56 EDT
5h ago 04.24 EDT A group of Germany’s leading economic institutes are predicting that its economy will shrink this year as high interest rates and inflation weigh on growth. Five economic institutes now estimate that German GDP will contract by 0.6% during 2023, down from their spring forecast of 0.3% growth. They estimate that the economy will contract by 0.4% in the July-September quarter, followed by 0.2% growth in Q4. Germany’s economy stagnated in Q2, having shrunk for the previous two quarters. Oliver Holtemoeller, head of the macroeconomics department at the Halle Institute for Economic Research (IWH), explains: “The most important reason for this revision is that industry and private consumption are recovering more slowly than we expected in spring. Growth of 1.3% is expected in 2024, rising to 1.5% in 2025. BREAKING: German Economic Institutes forecasts 🇩🇪 Germany's economy will contract by 0.6% this year — The Spectator Index (@spectatorindex) September 28, 2023

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