In the midst of tighter labor markets and backlogged supply chains, inflation continued its upward climb in June. Tariff implementation adds upside risk to inflation.
Producer prices for final demand rose 0.3 percent last month, pushing the year-over-year rate up to 3.4 percent. Similarly, the CPI came in at 2.9 percent on a year-over-year basis in June, marking the strongest pace in over six years.
After what was otherwise a strong week for inflation data, import prices declined 0.4 percent in June.
In the United Kingdom, data from the production side of the economy broadly signaled a rebound in economic growth in Q2, which should allow the Bank of England (BoE) to raise its main policy rate at its August meeting.
The big news this week was the United States' decision to initiate a process that could lead to another $200 billion in tariffs on imports from China.