German inflation stuck at 0.8% for third month in a row

29th September 2014, Comments 0 comments

Inflation in Germany, Europe's biggest economy, remained stuck at its current ultra-low levels for the third month in a row in September, preliminary data showed on Monday.

According to a flash estimate released by the federal statistics office Destatis, German inflation this month stood at just 0.8 percent year-on-year, unchanged since July.

The last time inflation in Germany was lower than 0.8 percent was in February 2010.

Inflation has been unusually low across the 18-nation eurozone, fuelling concern the region could slip into deflation -- a sustained and widespread drop in prices that hampers economic activity and threatens job losses.

While falling prices may sound good for consumers, deflation can trigger a vicious spiral where businesses and households delay purchases, throttling demand and causing companies to lay off workers.

Such concerns persuaded the European Central Bank to cut interest rates earlier this month and unveil other measures to ease monetary conditions in the single-currency area.

Using the Harmonised Index of Consumer Prices (HICP) -- the yardstick used by the ECB -- inflation in Germany also stood at 0.8 percent in September, far below the bank's annual inflation target of just below 2.0 percent.

© 2014 AFP

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