German inflation picks up tentatively in November: data

[FRANKFURT] Consumer prices in Germany, Europe's biggest economy, rose by an estimated 0.4 per cent in November, driven by higher costs for food, services and rents, official data showed on Monday.

The preliminary flash estimate could help assuage concerns of deflation in the eurozone as a whole, even if energy prices are continuing to fall.

Germany's national inflation yardstick, the consumer price index, inched 0.4 per cent higher this month, after edging up 0.3 per cent in October, the federal statistics office Destatis said.

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 in October.

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.

ECB chief Mario Draghi has suggested additional monetary easing could be on the cards imminently if inflation expectations do not pick up soon.

The inflation data on Monday were a preliminary flash estimate calculated from consumer price data for six of Germany's 16 regional states.

Final data based on all 16 states were scheduled to be published on December 11.

AFP