Euro zone industry output, inflation rise

Industrial production in the euro zone rose a slightly weaker-than-expected 0

Industrial production in the euro zone rose a slightly weaker-than-expected 0.3 per cent in June, and inflation in July picked up, the EU's statistics office said today.

Economists had expected industrial production in the 12-nation bloc to rise a monthly 0.4 per cent in June to give a year-on-year increase of 0.5 per cent .

In May, output shrank by 0.4 per cent from April.

Eurostat said the biggest jump in production in June was in durable goods and in the energy sector, up 1.2 per cent compared with May in both cases.

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Consumer demand for durable goods is seen by economists as an indicator of confidence.

In Germany, the euro zone's biggest economy, industrial production rose 1.1 per cent in June compared with May and 3.4 per cent compared with June 2004.

For the whole 25-nation EU, industrial production picked up 0.3 per cent in June against May and was up 0.4 per cent in year-on-year terms.

Data showed output rising in 13 countries and falling in nine. Figures were not available for Cyprus, Malta and Austria.

Production in June grew fastest in Portugal where output was up 8.7 per cent compared with May. Lithuania was bottom of the table with a fall of 4.4 per cent in monthly terms.

Eurostat confirmed inflation rose to an annual rate of 2.2 per cent in the euro zone in July, edging up from 2.1 per cent in June.

The data was in line with Eurostat's "flash" estimate, issued on July 30th, that inflation rose to 2.2 per cent in July.

Eurostat said consumer prices in the 12-nation area fell 0.1 per cent in July compared with June, compared with a consensus forecast of no change among analysts polled by Reuters.

The annual core rate of inflation referred to by the European Central Bank, excluding volatile energy and unprocessed food costs, was 1.4 per cent in July, unchanged from June.