German inflation rose in August on higher energy prices due to the Iran conflict, but the increase was less than expected and core inflation stabilised.
Inflation rose to 2.9% year on year from 2.8% the month before, preliminary data from the federal statistics office showed today.
Analysts polled by Reuters had forecast the EU-harmonised consumer price index to come in at 3.1% in August.
Energy inflation drove the increase, rising to 10.5% in August from 8.3% in the previous month.
The war in Iran had pushed up energy and raw material prices in previous months and the German government now expects inflation to accelerate to 2.7% this year and 2.8% in 2027.
Core inflation, which excludes volatile food and energy prices, remained unchanged from the previous month at 2.4%.
The German data comes ahead of the euro zone inflation release tomorrow. Inflation in the bloc is expected to come in at 3.3% in August, up from 2.9% in the previous month, according to economists polled by Reuters.
Meanwhile, annual consumer price inflation here was estimated to have risen to 3.4% in August from 3.1% July after a monthly jump in energy prices, a flash estimate from the Central Statistics Office showed today.
European Central Bank policymakers are ready to raise interest rates at their next meeting in September to contain the side-effects of the Iran war but they have little appetite to signal further tightening after that, sources told Reuters.
