German inflation picks up tentatively in January: data

12 Feb, 2016

FRANKFURT: Higher costs for food, services and rents pushed consumer prices in Germany, Europe's biggest economy, up by 0.5 percent in January, official data showed on Friday.

Confirming a preliminary flash estimate published at the end of January, the federal statistics office calculated that Germany's national inflation yardstick, the consumer price index, rose by 0.5 percent this month, after edging up 0.3 percent in December.

And using the Harmonised Index of Consumer Prices (HICP) -- the barometer used by the European Central Bank -- the inflation rate stood at 0.4 percent, also a tick higher than the 0.2 percent recorded in December.

The ECB regards annual inflation rates of close to but just under 2.0 percent as conducive to healthy economic growth and in recent years has 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 last year and initially appeared to work.

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

At the ECB's first policy meeting this year, president Mario Draghi suggested additional monetary easing could be on the cards as early as March if inflation expectations do not pick up soon.

Copyright AFP (Agence France-Presse), 2016

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