BERLIN (Reuters) – German inflation picked up more than expected in September to overshoot the European Central Bank’s price stability target, data showed on Thursday, supporting ECB President Mario Draghi’s plan to gradually wind down monetary stimulus.
German consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 2.2 percent year-on-year after 1.9 percent in the previous month, the Federal Statistics Office said.
This beat a Reuters poll of analysts who on average had predicted 2.0 percent. The ECB targets inflation of close to but below 2 percent for the single-currency bloc as a whole.
“The ECB will be pleased and should continue to follow its chosen path,” KfW chief economist Joerg Zeuner said.
With price pressures building in the euro zone, the ECB plans to wrap up its unprecedented 2.6 trillion euros (2.3 trillion pounds) scheme of bond purchases by the end of the year, but keep interest rates at record lows “through the summer” of 2019.
Draghi predicted on Monday a “relatively vigorous” pick-up in underlying inflation, taken by some investors as a signal for a quicker pace in normalising policy.
On the month, EU-harmonised prices rose by 0.4 percent, the preliminary numbers showed. That compared with the Reuters consensus forecast for an increase of 0.1 percent.
On a non-harmonised basis, German inflation rose by 2.3 percent year-on-year to hit the highest level since November 2011, the data showed.
Price pressures picked up on a broad basis, suggesting that the rise was also driven by core inflation and not only by the more volatile energy and food components. Germany’s preliminary inflation data do not include a figure for core inflation.
(Reporting by Michael Nienaber, Editing by Maria Sheahan)