Germany: Harmonized inflation moves above the ECB’s target again in October
Latest reading: Harmonized inflation rose to 2.4% in October from September’s 1.8%, rising above both the ECB’s target and the Euro area average of 2.0%. Looking at the details of the release, the upturn was broad-based, with food and housing costs increasing at a faster pace. Moreover, transportation prices were flat in October after decreasing in September.
That said, the trend was unchanged, with annual average harmonized inflation coming in at September’s 2.6% in October. Meanwhile, consumer price inflation rose to 2.0% in October from September’s 1.6%.
Finally, harmonized consumer prices rose 0.39% from the previous month in October, contrasting the 0.08% drop seen in September.
Panelist insight: ING’s Carsten Brzeski commented:
“Looking ahead, the stickiness of inflation at slightly too high a level still looks set to continue as favourable energy base effects will continue petering out while, at the same time, wages are increasing. […] On a more worrying note, leading indicators, such as selling-price expectations, have started to pick up again and have moved to their highest levels in more than a year. As a result, we continue to expect inflation to accelerate further in the final two months of the year before hovering within the broader range of between 2% and 3% in 2025.”