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German inflation picks up tentatively in November: data

[FRANKFURT] Consumer prices in Germany, Europe's biggest economy, rose modestly in November, driven by higher costs for food, services and rents, official data showed on Friday.

Confirming a preliminary flash estimate released at the end of last month, the federal statistics office Destatis calculated that Germany's national inflation yardstick, the consumer price index, inched 0.4 per cent higher in November, after edging up 0.3 per cent in October.

And using the Harmonised Index of Consumer Prices (HICP) - the barometer used by the European Central Bank - the inflation rate stood at 0.3 per cent, also a tick higher than the 0.2 per cent recorded the month before.

The ECB regards annual inflation rates of close to but just under 2.0 per cent as conducive to healthy economic growth and has recently 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 in March and initially appeared to work.

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

In order to counter this, ECB chief Mario Draghi said last week that the QE programme would be extended by six months until March 2017 and the central bank also cut one of its key interest rates.