German inflation rose more than expected in August, adding to the gloom on a day when unemployment topped three million for the first time in a decade.
Inflation rose to 2.1%, preliminary data from the federal statistics office showed today.
Analysts polled by Reuters had forecast EU-harmonised inflation increasing to 2% from last month’s 1.8%.
The German data comes ahead of the euro zone inflation release on Tuesday. Inflation in the currency bloc is expected to remain stable at 2.0% in August, according to economists polled by Reuters.
The European Central Bank left its key rate at 2% at its last meeting and it will probably do so again next month before discussions about further cuts likely resume in the autumn, especially if the economy weakens under US tariffs, sources told Reuters.
Germany’s core inflation rate, which excludes volatile food and energy prices, remained unchanged at 2.7% in August.
Earlier figures showed that inflation rose in four sizeable German states in August, preliminary data showed today.
In Germany’s most populous state of North-Rhine Westphalia, the year-on-year inflation rate grew to 2% from 1.8% in July.
That upward trend was reflected in the states of Bavaria, Baden-Wuerttemberg and Lower Saxony, where the inflation rate rose to 2.1%, 2.5% and 2.2%, respectively.
Reporting by Reuters
