Final HICP
October: +0.1% m/m, +2.9% y/y (revised from flat/+2.8%)
September: +0.2% m/m, +2.9% y/y
Final CPI
October: flat m/m, +2.5% y/y (unrevised)
September: +0.1% m/m, +2.6% y/y
—
FRANKFURT (MNI) – EU-harmonized consumer price inflation in Germany
was revised up for October to +0.1% and +2.9% on the month and year,
respectively, while national CPI flash estimates were confirmed, the
Federal Statistical Office reported on Thursday.
In line with the 3.5% decline in Brent crude between September and
October, motor fuel prices were 0.8% cheaper on the month to give an
annual rise of 12.7%. Household energy costs, on the other hand, still
managed a 0.9% m/m climb on the back of costlier gas and heating oil, to
give a 10.3% rise on the year.
Core inflation, which factors out energy, came in flat on the
month, resulting in an annual rate of +1.4%.
Food and non-alcoholic beverages prices were up 0.1% and 3.3% on
the month and year, respectively, while alcoholic drinks and tobacco
prices fell 0.1% on the month to give a 2.2% annual increase.
Weighed by cheaper motor fuel, transport prices fell 0.1%, reducing
the annual rise to 5.1%.
While October marks the ninth consecutive month of annual inflation
above 2%, price pressures are widely expected to wane as economic
activity slows and demand falls.
According to the October PMI polls, input price inflation in the
private sector as a whole slowed to its weakest pace since late 2009,
due in part to lower manufacturing costs, while strong competition for
new work hampered the full shift of cost burdens to clients.
Consumers already appear ready to take advantage of lower inflation
in the near term. A recent GfK survey showed households’ income
expectations rising on the back of lower inflation prospects, which
boosted their propensity to spend.
A European Commission survey, however, suggested that the upward
trend in inflation could continue for a little while yet. Selling price
expectations in all major sectors remained above the long-run average in
October and rose in services and retailing. Consumers’ view of near-term
price trends were stable and above average as well.
Germany’s council of independent economic advisers — the so-called
five wise men — on Wednesday forecast average CPI this year at 2.3% and
next year at 1.9%.
The upward revision to the German HICP figures point to upside
risks for the pan-Eurozone rate, scheduled for release on November 16.
According to the flash estimate, Eurozone inflation in October was
steady at September’s three-year high of 3.0%.
At a press conference last week following the ECB’s decision to cut
its main refinancing rate to 1.25%, ECB President Draghi predicted that
Eurozone inflation would likely fall below 2% over the course of next
year and said that the medium-term price outlook remained “broadly
balanced”.
“Inflation rates are expected to remain in line with price
stability over the policy-relevant horizon,” Draghi said. “This pattern
reflects the expectation that, in an environment of weaker euro area and
global growth, price, cost and wage pressures in the euro area should
also moderate.”
— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —
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