German inflation stable in August

[FRANKFURT] Inflation in Germany remained stable in August, with consumer prices 0.4 per cent higher than the same time last year, the federal statistics office Destatis said on Tuesday.

The final data confirms a preliminary figure based on just six of Germany's federal states released at the end of August.

"As in previous months, the low rate of inflation in August was mostly accounted for by falling energy prices," which shrank by 5.9 per cent, Destatis said in a statement.

Inflation excluding energy would have stood at 1.1 per cent, it said.

Looking at the rest of the consumer prices basket, food prices grew 0.9 per cent compared with Aug 2015, while prices for other consumer goods grew 0.6 per cent.

Meanwhile, service prices grew 1.3 per cent, driven largely by a sharp increase in home rental costs - which represent around 20 per cent of household spending - of 1.2 per cent.

Using the Harmonised Index of Consumer Prices (HICP) preferred by the European Central Bank, inflation stood at 0.3 per cent compared with August last year - a fall of 0.1 percentage points since July.

That was well short of the ECB target of inflation just below 2 per cent, enshrined in the institution's mandate as being most favourable to growth.

AFP