Economists predict rate cut amid German inflation rise

Inflation in Germany has increased slightly to 2.3% in July, from 2.2% the previous month, according to the German Federal Statistical Office. Despite the rise, Mathias Dollerup Sproegel, senior economist at Sydbank, remains optimistic about the future trend of inflation aligning with the European Central Bank’s (ECB) goal of 2%. Meanwhile, Spain reported a decrease in inflation from 3.6% in June to 2.9% in July. Sproegel believes these figures indicate the ECB may further ease monetary policy. Following rate hikes aimed at reducing inflation, the ECB lowered rates in June for the first time since 2019. Arbejdernes Landsbank predicts two more rate cuts this year, which could lead to lower mortgage rates for Danish homeowners, suggests Jeppe Juul Borre, chief economist. Homeowners with the shortest rate fixation experienced a slight rate drop on July 1st, the first in two years, and can expect further reductions if the ECB cuts rates again.