German inflation accelerated more than anticipated in November, in a sign that robust growth in Europe’s largest economy may be translating into higher prices.
Consumer prices rose an annual 1.8 percent, the Federal Statistics Office said on Wednesday. That’s faster than October’s 1.5 percent and beats the 1.7 percent median forecast in a Bloomberg survey of economists.
Germany’s economy is benefiting from strong global trade and a solid recovery in the euro area, as well as the boost to domestic consumption from the nation’s own record-low unemployment. Business confidence is at the highest level since the country’s reunification, and the future looks bright given the European Central Bank’s monetary stimulus and its commitment to keeping interest rates low for a long time.
German economic activity accelerated this month as companies continued their hiring spree to deal with a growing backlog of work. A crucial piece of the puzzle will be the result of wage negotiations as trade unions try to take advantage of improved conditions to obtain higher salaries and better working conditions from companies.
The German number comes one day before of data for the euro area, where consumer-price gains are expected to pick up to an annual rate of 1.6 percent, the fastest since April. While that may be cause for relief at the ECB, which will halve its monthly bond-buying from January, the Frankfurt-based institution has already warned that price growth will slow in the coming months before accelerating again.