German official inflation is 2.4% in July

27th July 2011, Comments 0 comments

Inflation in Germany, the biggest European economy, edged up to 2.4 percent in July, according to provisional data from the national statistics office that slightly exceeded analyst expectations.

That matched the previous high for 2011 set in April.

In June, German inflation had stood at 2.3 percent, and a survey by Dow Jones Newswires determined that analysts had pencilled in the same figure for July.

On a monthly basis, consumer prices rose by 0.4 percent in July, the Destatis office said, a steeper increase than the 0.1 percent level recorded in June.

Once again, rising energy costs, in particular for heating and motor fuels were singled out as the main factor behind the increases.

The European Central Bank has set an inflation target of below but close to 2.0 percent for the eurozone, and raised its key interest rate to 1.50 percent this month as inflation for the 17-nation bloc hit 2.7 percent.

Capital Economics economist Jennifer McKeown noted however that core German inflation was holding steady well below 2.0 percent and pointed also to slower growth of the ECB's M3 indicator of eurozone money supply.

"In all, the latest data seem to confirm the absence of underlying inflationary pressures in the eurozone, supporting our view that Julys ECB interest rate hike might prove to be the last in the cycle," she said.

© 2011 AFP

0 Comments To This Article