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German inflation creeps up to 2.4% in April
Global Banking & Finance Review®
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By Maria Martinez
BERLIN (Reuters) -German inflation rose slightly in April due to higher food prices and a smaller drop in energy prices than in previous months, preliminary data from the federal statistics office showed on Monday.
German consumer prices, harmonised to compare with other European Union countries, rose 2.4% in April, compared with 2.3% year-on-year in March.
“The downward trend in the German inflation rate that has been observed for a year and a half may have come to an end for the time being,” Commerzbank economist Ralph Solveen said, adding that the inflation rate is likely to rise again in coming months.
Economists pay close attention to German inflation data, as Germany publishes its figures before the wider euro zone inflation release, expected on Tuesday.
Euro zone inflation is expected to remain at 2.4%, unchanged from the previous month, according to economists polled by Reuters.
The European Central Bank has clearly signalled it will start lowering borrowing costs in June.
Core inflation in Germany, which excludes volatile food and energy prices, eased to 3.0% in April from 3.3% in March.
Commerzbank expects the core inflation rate to stabilise around current levels, as companies in the service sector in particular pass on large rises in wage costs to their customers.
(Reporting by Rachel More and Maria Martinez, Editing by Friederike Heine and Miranda Murray, Kirsten Donovan)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured as an annual percentage.
Core inflation is a measure of the long-term trend in prices, excluding items that face volatile price movement, specifically food and energy.
The Consumer Price Index (CPI) measures the average change over time in the prices paid by consumers for a market basket of goods and services.
The European Central Bank (ECB) manages the euro and implements monetary policy for the Eurozone, aiming to maintain price stability.
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