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German inflation going up

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German inflation going up

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Inflation in Germany – the euro zone’s biggest economy – accelerated to its fastest annual rate in two and a half years in April.

The German statistics office’s consumer price index showed households had to pay 2.4 percent more for goods and services compared to April last year

That will lead to speculation that the European Central Bank could raise interest rates for the euro zone again this summer.

In March, headline German inflation came in at 2.1 percent while for the euro zone as a whole it jumped to 2.7 percent, well above the European Central Bank’s target of close to but below two percent.

ECB Governing Council member Athanasios Orphanides warned on Wednesday that further interest rate adjustments would be needed if the inflation outlook worsened.

“If the picture we have of inflation in the euro zone deteriorates from what we have seen in the past few months then certainly more adjustment would be required,” Orphanides told a news conference in Nicosia.