German inflation dips further in August
German inflation dipped slightly in August, official data showed Wednesday, but remained at a level three times higher
than the European Central Bank's target rate.
The annual inflation rate in Europe's biggest economy eased to 6.1 percent, down from 6.2 percent in July, according to preliminary data from the federal statistics office Destatis.
The data was also a touch above the 6.0 percent forecast by analysts polled by financial data company FactSet.
Soaring energy prices in the wake of Russia's war on Ukraine had pushed up consumer prices in Germany in the last months.
While power prices have since fallen from their peaks, higher service costs and food prices were feeding into inflation.
The ECB has raised interest rates to their highest level since May 2001 to bring down the red-hot inflation, though its president Christine Lagarde has indicated that the aggressive rate-hiking campaign could be paused.
READ ALSO: Inflation in Germany drops to lowest level in more than a year
But the stubbornly high consumer prices in Europe's biggest economy, as well as trends elsewhere in the single-currency bloc could prove to be a conundrum for the central bankers at their next meeting in mid-September.
Noting that the drop in Germany's inflation was "somewhat smaller than expected," LBBW bank analyst Jens-Oliver Niklasch said the "data suggests that we will be preoccupied with the problem of inflation for some time".
Separately on Wednesday, another major EU economy, Spain, said consumer prices showed an uptick again in August.
Inflation in the southern European nation reached 2.6 percent for the month, slightly higher than the 2.3 percent recorded for July.
According to experts from the Institute for Macroeconomics and Economic Research (IMK) of the Hans-Böckler Foundation, a further normalisation of inflation can be expected in the coming years. They anticipate that 2023 will still see a lower overall inflation rate of more than five percent.
However, it is projected that inflation will only return to its usual level of around 2.5 percent in 2024.
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The annual inflation rate in Europe's biggest economy eased to 6.1 percent, down from 6.2 percent in July, according to preliminary data from the federal statistics office Destatis.
The data was also a touch above the 6.0 percent forecast by analysts polled by financial data company FactSet.
Soaring energy prices in the wake of Russia's war on Ukraine had pushed up consumer prices in Germany in the last months.
While power prices have since fallen from their peaks, higher service costs and food prices were feeding into inflation.
The ECB has raised interest rates to their highest level since May 2001 to bring down the red-hot inflation, though its president Christine Lagarde has indicated that the aggressive rate-hiking campaign could be paused.
READ ALSO: Inflation in Germany drops to lowest level in more than a year
But the stubbornly high consumer prices in Europe's biggest economy, as well as trends elsewhere in the single-currency bloc could prove to be a conundrum for the central bankers at their next meeting in mid-September.
Noting that the drop in Germany's inflation was "somewhat smaller than expected," LBBW bank analyst Jens-Oliver Niklasch said the "data suggests that we will be preoccupied with the problem of inflation for some time".
Separately on Wednesday, another major EU economy, Spain, said consumer prices showed an uptick again in August.
Inflation in the southern European nation reached 2.6 percent for the month, slightly higher than the 2.3 percent recorded for July.
According to experts from the Institute for Macroeconomics and Economic Research (IMK) of the Hans-Böckler Foundation, a further normalisation of inflation can be expected in the coming years. They anticipate that 2023 will still see a lower overall inflation rate of more than five percent.
However, it is projected that inflation will only return to its usual level of around 2.5 percent in 2024.
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