According to preliminary data from the statistical office Destatis, Germany’s inflation accelerated at a faster rate than expected in December. The EU measure of inflation, the harmonized index of consumer prices (HICP) climbed by 1.6% year-over-year.
The Reuters poll predicted a 1.4% increase.
On a monthly basis, prices rose by 0.8%, which was slightly faster than the 0.6% increase economists had predicted. Calculated by national standards, consumer prices advanced by 1.7% from the same period a year ago and rose by 0.6% month-on-month. Analysts had expected an annualized rise of 1.5% and a monthly increase of 0.5%.
Destatis said that the increase in food prices had the strongest impact on the increase in consumer prices. The second biggest increase was the rise in rental charges.
Food prices rose by 3% year-on-year. Energy prices climbed by 1.3%. Services costs edged up by 1.6%, while housing rent rose by 1.7%.
Germany’s consumer prices figures are closely-watched as they are crucial for the European Central Bank’s monetary policy.
At its December meeting, the regulator left its interest rates unchanged and kept its monthly bond purchases at 30 billion euros a month until September this year and longer if necessary.
In Germany, the core inflation outlook for 2017 was maintained at 1.3%, the forecast for 2018 was reduced to 1.6% from 1.7%, while the outlook for 2019 was left unchanged at 1.9%.
