Inflation Continues to Slow in Most European Economies

News provided by

Sep 04, 2014, 10:00 ET

NEW YORK, Sept. 4, 2014 /PRNewswire/ -- In July 2014, annual inflation as measured by the Harmonized Index of Consumer Prices (HICP) declined in 10 of the 16 economies compared, including in the U.S., Japan and the Euro Area as a whole.

Spain experienced the largest decline in price growth (from 0.0 to -0.4 percent), returning to deflationary territory for the second time this year. Inflation in Switzerland (-0.1 percent) was unchanged, meaning that the Swiss economy also remains in a deflationary environment. Prices accelerated substantially in Norway (from 1.8 to 2.2 percent), followed by slight gains in Denmark (from 0.4 to 0.5 percent).

"In July, inflation continued to slow in most European economies compared and reached a five-year low in France, Italy, Spain, and Belgium," said Elizabeth Crofoot, Senior Economist with the International Labor Comparisons program at The Conference Board. "German inflation has also been on a slowing path, declining from nearly 2 percent 12 months ago to 0.8 percent in July. As price growth is one factor determining cost competitiveness, slowing German prices makes it increasingly difficult for firms in the Euro Area to compete against the region's largest economy without increases in productivity or further cost reductions."

July inflation remains below 1 percent in all Euro Area countries compared, except Austria (1.7 percent). Inflation is above 1 percent in Japan (4.1 percent), Norway (2.2 percent), the U.S. (1.8 percent) and the United Kingdom (1.6 percent).

About HICP and International Labor Comparisons (ILC)

Harmonized Indexes of Consumer Prices are measures of consumer price inflation that have been standardized across countries based on European Union definitions. A monthly report compiles HICP trends for 16 economies, alongside conventional Consumer Price Indexes (CPI) as measured by national governments. The Conference Board adjusts official HICP and CPI metrics to a common base year to facilitate comparison with the United States.

The data is published as part of The Conference Board International Labor Comparisons program. Formerly a division of the U.S. Bureau of Labor Statistics, ILC is dedicated to producing economic indicators that optimize research, comparison, and planning in a global context.

NOTE: Beginning October 1, The Conference Board will no longer issue monthly International Labor Comparisons (ILC) reports on consumer prices and employment. This step will allow The Conference Board to dedicate more resources to continuing and strengthening the annual ILC reports on labor compensation, productivity and competitiveness. The underlying data tables on monthly consumer prices and employment will continue to be published on The Conference Board website through December 2014 (see schedule through December). Beginning January 1, 2015, related data series will be available via the Business Cycle Indicators program on a subscription basis. Historical monthly and annual datasets will remain publicly available on The Conference Board website.

For more information about The Conference Board ILC program:
www.conference-board.org/ilcprogram

For the associated report, tables, and technical notes, see
www.conference-board.org/ilcprogram/consumerpricesmonthly

About The Conference Board

The Conference Board is an independent business membership and research association working in the public interest. Our mission is unique: To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org.

Follow The Conference Board
Twitter | Facebook | LinkedIn

SOURCE The Conference Board