German inflation in two states points to unchanged national reading

By Maria Martinez

BERLIN (Reuters) -Inflation remained unchanged from the previous month in two important German states in July, preliminary data showed on Thursday, suggesting the country's national inflation rate could remain constant this month.

Inflation stayed at 1.8% in July in North Rhine-Westphalia, Germany's most populous state, as well as in Baden-Wuerttemberg, where it remained at 2.3%.

In Bavaria, the inflation rate rose in July to 1.9% from 1.8% in the previous month, while it fell to 1.9% in Lower Saxony from 2.2% in June.

Economists polled by Reuters had forecast a harmonised national inflation rate in Germany - the euro zone's largest economy - of 1.9% in July, down from 2.0% in the previous month.

National figures will be released later on Thursday.

The German data comes ahead of the euro zone inflation release on Friday. Inflation in the bloc is expected at 1.9% in July down from 2.0% in the previous month, according to economists polled by Reuters.

The European Central Bank left interest rates unchanged last week and offered a modestly upbeat assessment of the euro zone economy, raising doubts among investors about further policy easing.

(Reporting by Maria Martinez; editing by Matthias Williams)

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