German Inflation Accelerates as ECB Prepares to Debate StimulusBy
Consumer prices rose annual 1.8% in August vs estimated 1.7%
ECB will begin its two-day policy meeting on Sept. 6
German inflation accelerated more than economists predicted as European Central Bank officials prepare to discuss paring back stimulus.
The rate rose to 1.8 percent in August from 1.5 percent in July, the Federal Statistics Office in Wiesbaden said on Wednesday. Economists forecast an increase to 1.7 percent, according to a Bloomberg survey. Consumer prices rose 0.2 percent from the previous month.
The report from Europe’s largest economy comes a week before the ECB’s Governing Council convenes for a two-day meeting to discuss the future of its bond-buying program, which is scheduled to run at a pace of 60 billion euros ($72 billion) a month through the end of the year.
President Mario Draghi said in July that a decision will be taken in the fall and stressed that the ECB needs to be patient in unwinding stimulus to assure inflation is on a self-sustained upward path toward 2 percent. So far, there is little evidence even as economic growth in the euro area gathered pace in the second quarter and more countries joined the recovery.
Eurostat will report consumer-price data for the 19-nation region on Thursday. Economists surveyed by Bloomberg estimate the annual rate picked up to 1.4 percent in August from 1.3 percent in July. Going forward, inflation could face pressure from an appreciating euro, which on Tuesday reached the highest level against the dollar since January 2015.
In Spain, energy prices propelled consumer inflation to 2 percent in August, the fastest pace in three months, according to preliminary data released on Wednesday. The median forecast in a Bloomberg survey of economists was for a reading of 1.8 percent.
— With assistance by Andre Tartar, and Kristian Siedenburg