German Inflation Rises in February to Four Year High

German inflation accelerated further in February, reaching its highest level in four-and-a-half years and surpassing the European Central Bank’s price stability target of just under 2 percent, preliminary data showed on Wednesday.

German consumer prices, harmonized to compare with other European countries (HICP), rose by 2.2 percent on the year after an increase of 1.9 percent in January, the Federal Statistics Office said.



This was the highest annual inflation rate since August 2012 and came in slightly stronger than a Reuters consensus forecast of 2.1 percent.

On a non-harmonized basis, annual inflation also picked up to 2.2 percent after 1.9 percent in January.

Rising energy prices and higher food costs again were the main drivers behind the overall increase in February, a breakdown of the non-harmonized data showed.

With a federal election set for September, the inflation figures are likely to fuel calls for an end to the European Central Bank’s loose monetary policy.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza