Inflation in Germany edged up in April as food prices rose and energy prices fell less than in previous months, preliminary data from the Federal Statistics Office showed on Monday. Compared with other EU countries, consumer prices in Germany rose 2.4% in April, following a 2.3% annual increase in March. “The year-and-a-half-long downward trend in German inflation may be temporarily over,” Commerzbank economist Ralf Solving said, adding that inflation could rise again in the coming months.
Economists are closely watching German inflation data ahead of broader euro zone inflation data on Tuesday, which is expected to remain unchanged at 2.4%, unchanged from last month. The European Central Bank has made clear it will start lowering borrowing costs in June. Germany’s core inflation rate, which excludes volatile food and energy prices, fell to 3.0% in April from 3.3% in March. Commerzbank expects core inflation to stabilize around current levels, especially as service sector companies pass on sharp increases in wage costs to customers.
