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German inflation hits 4-1/2 year high in February

[BERLIN] German inflation accelerated further in February, reaching its highest level in four-and-a-half years and surpassing the European Central Bank's price stability target of just under 2 per cent, preliminary data showed on Wednesday.

German consumer prices, harmonised to compare with other European countries (HICP), rose by 2.2 per cent on the year after an increase of 1.9 per cent in January, the Federal Statistics Office said.

This was the highest annual inflation rate since August 2012 and came in slightly stronger than a Reuters consensus forecast of 2.1 per cent.

On a non-harmonised basis, annual inflation also picked up to 2.2 per cent after 1.9 per cent in January.

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Rising energy prices and higher food costs again were the main drivers behind the overall increase in February, a breakdown of the non-harmonized data showed.

With a federal election set for September, the inflation figures are likely to fuel calls for an end to the European Central Bank's loose monetary policy.