Berlin: German inflation rose more than expected in October, hitting the highest level in two years, preliminary data showed on Friday, a welcome sign for the ECB that its monetary policy is gradually pushing up price pressures in Europe’s biggest economy.
German consumer prices, harmonised to compare with other European countries (HICP), rose by 0.7 per cent on the year after an increase of 0.5 per cent in September, the Federal Statistics Office said.
This was the highest inflation rate since October 2014 and stronger than a Reuters consensus forecast of 0.6 per cent.
On a non-harmonised basis, German annual inflation picked up to 0.8 per cent after 0.7 per cent in September, the Statistics Office said. This was also the highest level in two years.
Energy prices remained the main drag on the headline figure, but they fell significantly less than in the previous months, a breakdown of the non-harmonised data showed.
A strong recovery in German inflation would give hawks like Bundesbank’s President and ECB rate setter Jens Weidmann more scope to argue for a reduction in the European Central Banks’ controversial bond-buying programme.
