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Germany’s annual inflation rate has accelerated at its fastest rate in more than four years, beating expectations to hit 2.2 per cent in February.
Accelerating from 1.9 per cent at the start of the year, Germany’s inflation rate is now at its highest since the midst of the eurozone debt crisis in August 2012. Economists had expected inflation to inch up to 2.1 per cent last month.
Consumer price growth in Germany is now above the European Central Bank’s average target of just under 2 per cent and will likely embolden the country’s hawkish critics of the ECB’s monetary policy stance.
Still, economists expect inflation across the eurozone to peak in the coming months – driven higher by energy costs – before falling back to more subdued levels over the rest of 2017 and 2018.
Latest figures on average eurozone inflation are due tomorrow. February readings from Spain show an inflationary surge to 3.1 per cent, while French prices actually moderated to 1.4 per cent.
German stats office Destatis said energy prices accelerated by 7.2 per cent in February compared to the same month last year, with food costs up 4.4 per cent and household rents up 1.6 per cent.
A measure of core inflation – which strips out volatile food and energy prices – also edged up to 1.3 per cent from 1.2 per cent last month.
The ECB will be meeting for its latest monthly decision next Thursday, with senior policymakers insisting that they will look through the current energy induced inflation surge. March will also mark the second year anniversary of the start of the quantitative easing programme.