German inflation back to zero in September

13 Oct, 2015

FRANKFURT: Consumer prices in Germany, Europe's biggest economy, did not rise in September, data showed on Tuesday, raising pressure on the ECB to prevent the wider euro area from slipping into a dangerous cycle of falling prices.

Germany's national inflation yardstick, the consumer price index, showed zero change this month, after rising by a meagre 0.2 percent the previous month, the federal statistics office Destatis said.

The main factor behind the slowdown was a renewed decline in energy prices, the statisticians explained.

Using the Harmonised Index of Consumer Prices (HICP) -- the barometer used by the European Central Bank -- the inflation rate in Germany actually declined by 0.2 percent year-on-year in September, the statisticians said.

The ECB regards annual inflation rates of close to but just under 2.0 percent as conducive to healthy economic growth and has recently launched a raft of measures to kickstart prices and push area-wide inflation back up nearer that level.

A controversial programme of sovereign bond purchases, known as QE or quantitative easing, was rolled out in March and initially appeared to work.

But the economic slowdown in China and depressed oil prices have pushed inflation expectations back down again.

The final data on Tuesday confirmed a preliminary flash estimate published at the end of last month.

Analysts said the data will raise the heat on the ECB to step up its anti-deflation measures.

Copyright AFP (Agence France-Presse), 2015

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