March 11th, 2011
Econintersect: Consumer inflation crept up for the fourth month in Germany. Wholesale prices rose even more sharply, cementing expectations the European Central Bank will soon eaise interest rates to dampen inflationary pressures.
The Federal Statistical Office said Friday that consumer inflation in Europe's largest economy ran at an annual 2.1% in February. The increase was unexpected after the government had forecast a 2% rate based on preliminary figures. Follow up:
Follow up:The rise in consumer prices was driven by large increases in energy prices, which were up 10.2% compared with February 2010. Food prices were also up 3.4% compared with the same month the year before.
The inflation rate was only 0.6% a year ago, and sat at 1.3% in October 2010 when it began to rise. Even more alarming, wholesale prices rose 10.8% in February over the same month last year, the highest annual jump since October 1981.
Agricultural raw materials such as grain and animal feed rose 82.9% and wholesale prices for coffee, tea and spices rose 46.4%. Wholesale fruits and vegetables jumped 13.5%.
Source: Yahoo News - Associated Press