German inflation rises in December due to base effects

GERMAN inflation rose in December due to base effects, putting a temporary halt on the downward trend seen in the last months.

Inflation, harmonised to compare with other European Union countries, rose in December to 3.8 per cent, the federal statistics office said on Thursday (Jan 4), in line with the expectations of analysts polled by Reuters.

German consumer prices had risen by 2.3 per cent year-on-year in November.

Economists pay close attention to German inflation data, as Germany usually publishes its figures one day before the eurozone inflation data release.

Eurozone inflation is expected to rise to 3.0 per cent in December from 2.4 per cent in November, according to economists polled by Reuters.

In December, European Central Bank President Christine Lagarde flagged upside inflation risks to push back on imminent rate cuts.

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The rise in German inflation is due to base effects stemming from last December’s energy relief measures for gas and district heating, the statistics office said. REUTERS