According to the Flash Survey,
- New business across the German services sector barely increased in August.
- Firms also reported sharp falls in new export business orders.
- Backlogs of work declined, forcing firms to reduce staffing levels amidst the weak demand environment.
- Output price inflation accelerated, while input prices increased at the slowest pace since March 2021.
ECB Rate Cut Expectations
The input price and labor market subcomponents of the Flash survey may fuel speculation about a September ECB rate cut.
Weaker labor market conditions and downward input price trends could signal a softer inflation outlook. Input prices consider wages. Softer wages could reduce…
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