Kapital Macro: Germany's service sector inflation remains a concern for the European Central Bank

July 1st, Jinshi data, Senior European Economist at Capital Macro, Palmas, said that although Germany's overall inflation rate has fallen more than expected, the service industry inflation remains high, which will keep the European Central Bank policymakers cautious. In June, the service industry inflation rate remained at 3.9%, unchanged from May, and the core inflation rate dropped from 3.0% to 2.9%. Palmas said that the slow deflation in core and service industries is consistent with the view that the European Central Bank will gradually cut interest rates. He expects the European Central Bank to pause in cutting interest rates in July and then cut interest rates twice later this year.