German official inflation regains yearly high of 1.2 pct

10th August 2010, Comments 0 comments

German inflation was revised slightly upward for July to an annualised 1.2 percent, the national statistics office said on Tuesday, regaining a high for the year reached already in May.

The Destatis office had initially estimated inflation in Europe's biggest economy at 1.1 percent, following a dip to 0.9 percent in June.

Higher energy prices, in particular for heating and motor fuels, were key factors in the increase, Destatis said.

"The prices of mineral oil products are well above the level of 2009," a statement said, while electricity also cost more.

Marked rises were also seen in the cost of fruit and vegetables in addition to sharp seasonal hikes in the cost of holiday lodging, package holidays and air travel, which alone gained 10.3 percent from June.

On a monthly basis the overall consumer price index gained 0.3 percent in July, up from an earlier forecast of 0.2 percent.

The 12-month figure nonetheless remained well under the European Central Bank's threshold of below but close to 2.0 percent.

With inflation in Europe's top economy subdued, the ECB is likely keep its main interest rate at a record low of 1.0 percent well into 2011, economists say.

© 2010 AFP

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