Money prices rise in June - "Last jump up" before tax cut

17:55  29 june  2020
17:55  29 june  2020 Source:   de.reuters.com

Canadian exemption from U.S. aluminium import levy under scrutiny

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Outbreak of the coronavirus disease (COVID-19) near Bonn © Reuters / WOLFGANG RATTAY Outbreak of the coronavirus disease (COVID-19) near Bonn

Berlin (Reuters) - German inflation is in June despite the corona crisis increased surprisingly.

The rate of inflation climbed to 0.9 from 0.6 percent in the previous month, as the Federal Statistical Office announced on Monday. In May it was still at the lowest level since September 2016. Economists had expected the level to remain unchanged. Economist Marco Wagner from Commerzbank speaks of a "last leap" upwards: "In the second half of the year, the inflation rate should be significantly lower in view of the temporary reduction in VAT."

Yellowknife's consumer prices are falling for the first time in more than a decade

  Yellowknife's consumer prices are falling for the first time in more than a decade The plummeting price of fuel is driving consumer prices downward in Yellowknife for the first time in more than a decade, according to new data from Statistics Canada. A drop in consumer prices may sound like a good thing — but historically, falling prices have been a sign of economic trouble, and analysts say the trend for the N.W.T. looks particularly bleak. The consumer price index measures the prices of common household expenses against a benchmark of 100 points set in 2002. Since then, consumer prices in Yellowknife have risen by 38 points, close to the national average of 36.

Experience from the 2008/09 financial crisis showed that companies only partially pass on the lower sales tax to consumers. From the Commerzbank expert's point of view, however, this should be sufficient to push the inflation rate close to the zero line in July. To strengthen domestic demand in the corona crisis, the federal government has decided to lower VAT for six months from 19 to 16 percent or from seven to five percent as of Wednesday.

The Federal Statistical Office had recently worked through the effects of the upcoming tax cut on inflation: If passed on to customers in full, this could cause a "purely mathematical" decrease in consumer prices by 1.6 percent. The extent to which the cut will be passed on to consumers is still unclear, however, since full disclosure is not required by law. [L8N2DS2CY]

That costs the transmission of the Bundesliga matches

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These foreseeable price developments in Germany should cause additional worries for the European Central Bank (ECB): it sees inflation of just under two percent as ideal for the economy, but has failed to achieve this goal for the euro area for years. Inflation data from the currency area for June, coming on Tuesday, should also not be to the liking of the currency keepers: experts expect an increase of only 0.1 percent.

The global economic downturn as a result of the corona pandemic has depressed the oil price in the past few weeks and thus also slowed inflation in Germany. According to the statisticians, energy fell by 6.2 percent in June within a year - but not as much as in May at 8.5 percent. The effect of falling oil prices on inflation has ended, said Helaba expert Ralf Umlauf in a first reaction to the data. On the other hand, food such as fruit and vegetables rose again by 4.4 percent, which was well above average. Services cost 1.4 percent more, with rents rising by 1.4 percent. Goods rose by a total of 0.2 percent, after a minus of 0.4 percent in May.

Corona crisis: More Cologne unemployed than in the financial crisis .
© dpa The employment agency The number of unemployed in Cologne continued to rise in June due to the Corona crisis. With 58,013 unemployed, it is now above the peak of the financial crisis in 2008/2009 (57,653 in February 2008). Compared to the previous year, the number rose by 23.3 percent, compared to the previous month by 2.1 percent and thus somewhat weaker than last time. The unemployment rate was 9.4 percent in June.

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