Germany’s annual consumer price inflation fell to 8.6% in December 2022, from 10% reported in November and below the market consensus of 9.1% preliminary estimates showed. Inflation has been running rampant mainly due to energy costs which has led the ECB to raise rates aggressively and has impacted the German Bund sending yields to levels not seen since 2011. It was the inflation lowest rate since August. The German government with a one-time payment in December lowered household natural gas bills by covering the monthly instalment for gas and heat for all households and small- to medium-sized businesses.
The lower prices should bring a smile to the ECB. On a monthly basis, consumer prices dropped 0.8% in December, much more than an expected 0.3% decline Inflation remained well above the European Central Bank’s target of about 2%.
Goods inflation slowed sharply to 13.9% (vs 17.1% in November) due to smaller increases in costs for both energy (24.4% vs 38.7%) and food (20.7% vs 21.1%).
Services inflation however accelerated to 3.9% (vs 3.6% in November), with rent prices advancing 1.9%, the same pace as in November.
From The TradersCommunity News Desk