German Inflation Accelerates as Effect of Oil-Price Slump Fades

  • Consumer prices rise 0.3 percent in November from year ago
  • ECB meets Dec. 3 to decide on need for more euro-area stimulus

German inflation accelerated to the fastest since May, as last year’s slump in energy prices started to drop out of calculations.

Consumer prices in Europe’s largest economy rose an annual 0.3 percent this month after a gain of 0.2 percent in October, the Federal Statistics Office in Wiesbaden said on Monday. The figure, based on a harmonized European Union method, matched the median estimate in a Bloomberg survey of economists.

The impact of lower energy costs has become a point of debate in European Central Bank discussions over whether the euro area needs more stimulus, with some policy makers saying inflation will accelerate in coming months. In contrast, ECB Executive Board member Peter Praet, the institution’s chief economist, has warned of an indirect effect of weak oil prices on core inflation, and President Mario Draghi has signaled that further monetary easing will come at the Dec. 3 policy meeting.

The price of Brent crude plunged 18 percent in November 2014, and by the same amount in December 2014. While declines have slowed since then, the downward trend has continued.

The German figures show that domestic energy prices slid 7.5 percent in November from a year ago. Food prices climbed 2.3 percent and services prices rose 1.2 percent.

Euro-area inflation data for November will be published on Dec. 2 at 11 a.m. in Luxembourg. The rate is forecast in a Bloomberg survey to have picked up to 0.2 percent from 0.1 percent the previous month. The ECB’s goal is just under 2 percent.

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