German inflation slows more than expected in October

German Inflation Slows More Than Expected in October with Fuel Tax Relief

Overview of German Inflation Trends and Contributing Factors

October Inflation Data and Fuel Tax Impact

BERLIN, Oct 30 (Reuters) - German inflation eased more than expected in October, the first month of a government fuel tax cut, as lower prices at the pump helped slow consumer price growth.

Inflation slowed to 2.8% year-on-year, preliminary data from the federal statistics office showed on Friday.

Analyst Expectations vs. Actual Figures

Analysts polled by Reuters had forecast the EU-harmonised consumer price index to come in at 3.1% in October, compared with 3.3% in September.

Energy and Core Inflation Breakdown

The rise in energy prices slowed slightly in October, to 12.2%, from 14.9% in September.

Core inflation, which excludes volatile food and energy prices, fell to 2.1% from 2.4% the month before.

Fuel Tax Reduction Details

The fuel tax reduction, introduced at the start of October and due to remain in place until year-end, has led to a modest decline in fuel prices.

Broader European Inflation Context

The German data comes ahead of a euro zone inflation update due on Wednesday. Inflation in the bloc is expected to come in at 3.9% in October, slightly above September's 3.8%, according to economists polled by Reuters.

European Central Bank Policy Response

The European Central Bank left interest rates unchanged on Thursday but clearly hinted at another hike in December, with a warning that high and rising energy costs were fuelling inflation risks.

(Reporting by Kirsti Knolle and Miranda Murray, editing by Friederike Heine and Ludwig Burger)