Tags: German | Inflation | Rose

German Inflation Accelerated More Than Initially Estimated

Thursday, 13 Oct 2011 08:32 AM

Inflation in Germany, Europe’s largest economy, accelerated more than initially estimated in September, led by energy costs.

The inflation rate, calculated using a harmonized European Union method, rose to 2.9 percent from 2.5 percent in August, the Federal Statistics Office in Wiesbaden said today. That’s the highest since Sept. 2008. It had previously reported a rate of 2.8 percent. In the month, prices rose 0.2 percent.

The European Central Bank last week kept its key interest rate at 1.5 percent and said euro-region inflation will stay “clearly” above its 2 percent ceiling over the coming months before slowing in 2012. With governments toughening spending cuts and the economy cooling, companies may struggle to pass on higher costs. ECB council member Ewald Nowotny said on Oct. 10 that “fear is justified” on the economic development.

“Inflation has reached its peak,” said Carsten Brzeski, senior economist at ING Group in Brussels. “There’s a recession risk in winter. Nevertheless, the German as well as the euro- region economy won’t fall off a cliff, making early rate-cut fantasies premature.”

The euro dropped after the report, trading at $1.3780 at 8:05 a.m. in Frankfurt, little changed on the day.

Household energy was 9.8 percent more expensive from a year earlier, while prices of gas rose 5.4 percent, today’s report showed. Heating oil prices increased 23.8 percent from September 2010 and diesel was 16.7 percent more expensive.

German wholesale prices rose 5.7 percent in September from a year earlier after increasing 6.5 percent in the previous month, the statistics office said yesterday. Annual gains in import and producer prices both weakened in August.

A deepening economic slowdown and waning demand may further ease price pressures. The ECB on Sept. 8 revised its forecast for euro-area growth this year to 1.6 percent from 1.9 percent, and to 1.3 percent from 1.7 percent in 2012. Inflation may average 2.6 percent this year and 1.7 percent next, it said.

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Inflation in Germany, Europe s largest economy, accelerated more than initially estimated in September, led by energy costs. The inflation rate, calculated using a harmonized European Union method, rose to 2.9 percent from 2.5 percent in August, the Federal Statistics...
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Thursday, 13 Oct 2011 08:32 AM
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