German industrial production numbers have dropped by 1.7 per cent in July, from 2.0 per cent growth last month (revised down from 2.4 per cent).
So that's bad news on two counts, with economists estimating that production would only fall by 0.5 per cent.
It's a bit of a weird morning, with hard data conflicting with improving purchasing managers' index scores.
Jennifer McKeown, senior European economist, Capital Economics:
Surveys of industrial activity are consistent with a renewed recovery in time – the manufacturing PMI suggests that the annual growth rate could pick up from July’s -2.2% towards +5%. But for now, with production in Q3 very unlikely to come near Q2’s 1.3% rise, GDP growth looks set to slow quite sharply after the 0.7% quarterly gain seen last quarter.
German trade data released earlier today revealed a fall in exports in July that supports this picture. In all, the data will dent hopes of a rapid recovery in Germany and hence in the euro-zone as a whole, justifying the cautious tone struck by the ECB yesterday.