FRANKFURT AM MAIN: Inflation in Europe’s largest economy Germany remained above the European Central Bank’s target in October, official data showed Tuesday, contrasting with an earlier release showing sluggish growth in the eurozone.
Prices added 2.5 percent year-on-year this month, preliminary data from federal statistics authority Destatis said, a higher reading than anticipated by analysts surveyed by data company Factset and 0.2 percentage points faster than in September.
Measured using the ECB’s preferred yardstick, the Harmonised Index of Consumer Prices (HICP), inflation mounted to 2.4 percent — still well above the central bank target of just below 2.0 percent.
Much of the increase was down to energy, where year-on-year price growth jumped more than one point compared with September, to 8.9 percent.
That was more than four times as fast as other major items like food or housing rents.
At first glance, higher inflation in Germany should confirm the ECB’s plan to withdraw massive monetary stimulus from the eurozone economy by year’s end.
After more than three years, the Frankfurt institution plans to halt mass purchases of government and corporate bonds, designed to pump cash through the financial system and into the hands of firms and households.
The scheme is intended to stoke economic activity and inflation across the euro area, and policymakers are confident of staying close to the just-below-2.0-percent price growth target between now and 2020.
But a new wrinkle appeared in quarterly growth data for the 19-nation single currency zone Tuesday, as Eurostat reported economic expansion of just 0.2 percent quarter-on-quarter between July and September.
That compared with 0.4 percent in the previous quarter and with analyst forecasts for the same figure. —AFP