Photographer: Martin Leissl/Bloomberg

German Inflation Fails to Pick Up as ECB Weighs Adding Stimulus

  • Consumer prices increased annual 0.7 percent in November
  • Euro-area inflation report due to be published Wednesday

German inflation unexpectedly remained unchanged in November, suggesting the European Central Bank may need to do more to meet its goal for price growth in the 19-nation euro area.

Consumer prices rose 0.7 percent from a year ago, the Federal Statistics Office in Wiesbaden said on Tuesday. That’s below the 0.8 percent rate forecast by economists in a Bloomberg survey. Prices were unchanged from October.

Stubbornly low inflation in Europe’s largest economy might concern ECB policy makers as they assess risks to the region’s outlook. At their next meeting on Dec. 8, they will debate whether 1.7 trillion euros ($1.8 trillion) of asset purchases will be enough to return euro-area inflation to below but close to 2 percent -- a level not reached in more than three years -- or if more stimulus is needed.

A national measure of inflation remained at 0.8 percent, according to the report.

Recent data on business confidence and output suggest that German economic momentum remains robust. The Bundesbank said last week that growth will likely pick up considerably in the final three months of the year, after a temporary slowdown in the third quarter.

The fortunes of Germany are key to the recovery of the euro area, where economic expansion is stuck at mediocre levels and risks remain on the downside. The region’s inflation rate rose to 0.6 percent in November from 0.5 percent the previous month, according to a separate Bloomberg survey. Eurostat will publish that report on Wednesday.

ECB President Mario Draghi said at a European Parliament hearing on Monday that the Governing Council will preserve the high level of monetary accommodation necessary to reach its inflation target. Policy makers including Peter Praet, the institution’s chief economist, have warned repeatedly that they’re lacking convincing signs of an upward trend in underlying price pressures.

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