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Eurozone July inflation confirmed at 8.9%, core measure sharply up

By Reuters_News

08:54, 18 August 2022

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Signage is seen outside the European Central Bank (ECB) building, in Frankfurt, Germany, July 21, 2022.
Signage is seen outside the European Central Bank (ECB) building, in Frankfurt, Germany, July 21, 2022.

- Euro zone inflation reached a new record high of 8.9% year-on-year in July, the EU's statistics office confirmed on Thursday, with the core measure, excluding the most volatile components and key for monetary policy, also sharply up.

The European Union's statistics office Eurostat said consumer prices in the 19 countries using the euro rose 0.1% month-on-month in July for a 8.9% year-on-year increase, the highest since the euro was created in 1999.

Eurostat said that of the total, 4.02 percentage points came from more expensive energy -- the costs of which surged because of Russia's invasion of Ukraine -- and 2.08 percentage points from more expensive food alcohol and tobacco.

But even when these most volatile components are excluded, in what the European Central Bank calls core inflation and watches closely in interest rate decisions, prices still were 5.1% year-on-year higher in July.

The ECB's headline inflation target is 2%

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Last month, the bank started a tightening cycle after years of ultra-loose monetary policy, but still the prices of services, which create more than two thirds of the euro zone's GDP, rose 3.7% year-on-year in July, adding 1.6 percentage point to the final outcome.

Industrial goods were 4.5% more expensive than 12 months earlier, adding 1.16 percentage point to the final headline figure.

 

Reporting by Jan Strupczewski

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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