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Sliding German butter prices spread hope of lower food inflation

Ariane Curtis, an economist at Capital Economics, said the acceleration of eurozone wage growth above 5 per cent in recent months could slow the decline. “Strong wage growth is one of the factors keeping food inflation so elevated,” she said. “The historical relationship between food inflation and agricultural prices has seemingly broken down recently and so it’s unlikely that the fall in energy input prices in itself will be enough to drive food inflation negative by the end of the year.”

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