German inflation highest since November 2008

28th September 2010, Comments 0 comments

Prices in Germany rose at their fastest annual rate since November 2008 in September, official data showed Tuesday, but the gain was still well below the European Central Bank's inflation threshold.

Inflation rose 1.3 percent compared to September 2009, driven by hihger energy and fruit prices, according to preliminary figures from the Destatis national statistics office.

Compared to August, however, prices dropped 0.1 percent.

A key factor in Germany's low inflation has been relatively modest wage increases but the powerful IG Metall trade union has called for a six-percent hike for 85,000 steel workers, launching what could be bitter pay talks.

The inflation figure still remains well below the European Central Bank's threshold of "close to, but below two percent."

"For now, inflation is not much of a concern for the ECB and the central bank will not raise interest rates before 2012," said Simon Junker, an analyst at Commerzbank.

© 2010 AFP

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