German inflation remains above ECB target
BERLIN: German annual inflation accelerate data slower pace in november but stayed well above the European Central Bank’s target, supporting the central bank’s case for gradually rolling back its massive stimulus in the eurozone.
German consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 2.2 per cent year-on-year after an increase of 2.4 per cent in the previous month, the Federal Statistics Office said on Thursday.
The ECB targets inflation of close to but below 2 per cent for the singlecurrency bloc as a whole.
With price pressures building in the eurozone, the ECB last month confirmed its plan to end its 2.6 trillion euro ($3 trillion) bond-buying programme at the end of this year and raise interest rates for the first time since 2011 sometime after next summer.
On the month, Eu-harmonised prices rose by 0.1 per cent, the preliminary numbers showed, compared with the forecast for a 0.2 per cent increase.
A breakdown of the data showed that energy prices rose more in November than in the previous month, while the cost of food, goods, services and household rents increased by the same amount or at a slightly slower pace than in October.
Energy prices have risen in Germany despite oil prices falling due to a relentless rise in US crude supply and Saudi Arabia’s insistence that it will not cut output on its own to stabilise the market.
This is because the cost of delivering oil in Germany has risen as suppliers had to forgo ship deliveries as a dry season extended into autumn, resulting in falling water levels that shut vital supply routes through rivers and canals in the western state of North Rhine-westphalia. Prices for energy rose by 9.3 per cent this month, the highest increase since 2011.
The energy prices are unlikely to dampen private consumption in Europe’ s economic power house, which continues to provide positive impulses for a growth cycle facing headwinds from weakening exports.
Separate data released on Thursday by the Federal Labour Office showed that jobless numbers fell by more than expected in November, pushing the unemployment rate to a record low.