A more than 2 per cent inflation milestone for Germany.

Annual producer price inflation in Europe’s largest economy more than doubled to hit 2.4 per cent last month, mirroring the climb in consumer prices seen across the continent at the start of the year.

A measure of inflation faced by German manufacturers, the producer price gauge has stormed out of deflation over the last two months and provides a good early hint at price pressures building in the economy. January’s reading was the highest since March 2012 and accelerated from the 1 per cent hit at the end of the year.

Meanwhile, Germany’s consumer price inflation hit 1.9 per cent in January compared to the same month in 2016 – the highest level in four years and pushed up by the rising cost of energy.

Destatis said energy prices faced by German factories rose by 4 per cent in January with the cost of mineral oil products surging by nearly 20 per cent and electricity costs up 6.5 per cent.

Excluding energy, the producer price index rose 1.8 per cent.

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