German Inflation Accelerates To 2.2% In August

(RTTNews) - Consumer price inflation in Germany climbed in August to its highest level in five months, while the core figure was steady amid an acceleration in food price growth, and weakened chances for further easing from the European Central Bank in the near term.

The consumer price index rose 2.2 percent year-on-year following a 2.0 percent rise in each of the previous two months, preliminary estimates from the statistical office Destatis showed on Friday. Economists had forecast 2.1 percent inflation. Headline inflation was the strongest since March, when it was at the same level.

Core inflation, which excludes food and energy prices, was 2.7 percent, unchanged since June.

Inflation in the biggest euro area economy is now above the 2.0 percent target of the ECB that has signaled a wait-and-watch stance as policymakers wait for more clarity regarding the impact of the trade tariffs on the real economy going forward.

"The national consumer price figures for August available so far do not indicate any major surprises in the figures for the eurozone due on Tuesday," Commerzbank senior economist Ralph Solveen said.

"Inflation remaining close to the ECB's target level is unlikely to prompt the ECB to consider changing its key interest rates, either upwards or downwards."

Food inflation accelerated to 2.5 percent from 2.2 percent. Energy prices decreased 2.4 percent following a 3.4 percent slump in the previous month. Services inflation was steady at 3.1 percent.

Compared to the previous month, the CPI edged up 0.1 percent in August after a 0.3 percent increase in July. Economists had expected prices to remain unchanged.

The harmonized index of consumer prices, or HICP, rose 2.1 percent year-on-year following a 1.8 percent increase in July. Economists had expected the EU measure of inflation to rise to 2.0 percent. The HICP inflation was the highest in three months. On a month-on-month basis, the HICP edged up 0.1 percent after a 0.4 percent increase in July. Economists had expected the measure to remain unchanged.