Inflation in Germany Surpasses ECB Target

Forex - In Germany, inflation exceeded the European Central Bank's target in November, underscoring that the path for inflation is expected to be volatile, though it will not prevent policymakers from lowering interest rates in December.

According to a statement made today by the Federal Statistical Office (Destatis), consumer prices rose by 2.2% in November compared to the same month last year, up from 2.0% in October. Analysts had expected a 2.3% increase. On a monthly basis, however, there was a decline of 0.2%.

The EU-harmonized inflation rate showed a monthly decrease of 0.7%, while on an annual basis, it increased by 2.4% against an expectation of 2.6%.

Despite the rise in October, largely driven by energy prices, inflation is expected to cool in the coming months due to increasing unemployment and slowing wages amidst Germany's struggling economic growth.

This situation, particularly impacting service prices, has long been a concern for policymakers and a symbol of inflationary pressures. Service inflation remained steady at 4.0%, while the core inflation, excluding more volatile energy and food prices, rose from 2.9% to 3.0%.