Germany’s consumer price inflation accelerated more-than-expected in September to its highest level in nearly seven years, initial estimates from the Federal Statistical Office showed Thursday.
The consumer price index rose 2.3 percent year-on-year following a 2 percent increase, each in July and August. Economists had expected the rate to remain unchanged.
The latest CPI inflation rate was the highest since November 2011, when it was 2.4 percent. Headline inflation has held above the European Central Bank’s “below, but close to 2 percent” target for five months in a row.
Earlier this week, ECB President Mario Draghi warned that the underlying inflation in the euro area is likely to see a relatively vigorous pick-up in underlying inflation.
The hot and dry weather was largely to blame for the pick-up in inflation.
Energy inflation accelerated to 7.7 percent from 6.9 percent and food inflation climbed to 2.8 percent from 2.5 percent.
“An increase in core inflation has been and currently still looks much more like wishful thinking than reality,” ING economist Carsten Brzeski said.
“With today’s German inflation data any pick-up in core inflation in the Eurozone still is much more relative than vigorous.”
Compared to the previous month, the CPI rose 0.4 percent, which was faster than the 0.1 percent increase economists had forecast.
The harmonized index of consumer prices, or HICP, climbed 2.2 percent year-on-year in September after a 1.9 percent increase in the previous month. Economists had expected the rate to hold steady.
The HICP inflation rate, which is meant for EU comparison, was the highest in four months.
On a month-on-month basis, the HICP rose 0.4 percent in September, which was faster than the 0.1 percent economists had expected.
The statistical office is scheduled to release the final results for September CPI on October 12.