Preliminary figures show inflation in Germany rose sharply to an annual rate of 1.7 percent last month, the highest in three years, as prices for heating and fuel increased.
The state statistics agency Destatis said on Tuesday that the inflation rate jumped from 0.8 percent the month before. The increase would help boost inflation across the 19 nations that use the euro, figures for which were due yesterday.
The European Central Bank (ECB) has cut interest rates and is injecting 80 billion euros a month into the financial system to push up eurozone inflation from weak levels — 0.6 percent in November — toward its goal of just under 2 percent, which is considered best for the economy.
The ECB remains focused on core inflation, which excludes volatile energy prices.
NO RETHINK
“With underlying price pressures still very subdued throughout the eurozone, the ECB need not rethink its high level of policy support,” Capital Economics chief European economist Jennifer McKeown wrote in a research note.
McKeown said that the eurozone inflation figure could rise to as high as 1.2 percent when released.
She said that the upward trend could be temporary, but noted that rising prices would weigh on household incomes in the meantime.
The ECB has said it will keep buying bonds until the end of this year, a measure which could keep the euro lower against the US dollar.
JOBLESS RATE RISES
Earlier, separate figures showed Germany’s unadjusted unemployment rate ticked up to 5.8 percent last month from 5.7 percent in November, mainly due to seasonal factors.
The German Federal Labor Agency said that 2.568 million people were registered as unemployed. That was 36,000 more than in November, but 113,000 fewer than in December the previous year, when the unemployment rate was 6.1 percent.
The unemployment rate in Europe’s biggest economy regularly rises during the winter months when jobs in some sectors, such as construction, are less available.
In seasonally adjusted terms, the unemployment rate was steady at 6 percent for the third consecutive month.
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