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German inflation eases unexpectedly, hits lowest since 2016

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German inflation eases unexpectedly, hits lowest since 2016
FILE PHOTO: A construction site is reflected on a skyscraper facade in Berlin, Germany, May 30, 2018. REUTERS/Axel Schmidt   -   Copyright  AXEL SCHMIDT(Reuters)
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BERLIN (Reuters) – German annual inflation slowed unexpectedly in July to hit the lowest level since November 2016, data showed on Tuesday, likely to lend support to doves among ECB policymakers who want to inject more monetary stimulus into the single currency bloc.

German consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 1.1% year-on-year after an increase of 1.5% in the previous month, the Federal Statistics Office said.

The July reading undershot a Reuters forecast for 1.3% and marked the third month in a row that the inflation figure remained well below the European Central Bank’s target level of close to but below 2% for the euro zone as a whole.

On the month, EU-harmonised prices rose by 0.4% after 0.3% in the previous month. That was also below market expectations.

(Reporting by Michael Nienaber; Editing by Michelle Martin)

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