German inflation rises to 2.4%

Friday, 29 April 2011 00:01 - - {{hitsCtrl.values.hits}}

FRANKFURT, 2011 (AFP) - Inflation picked up to 2.4 percent in Germany this month, the highest level since September 2008, provisional data released by the national statistics office showed, from 2.1 percent in March.

The result was in line with an average analyst forecast compiled by Dow Jones Newswires and underscored rising price pressures in the biggest European economy as it continues a strong recovery.

On a monthly basis, consumer prices gained 0.2 percent, the Destatis office reported, which was also what analysts had expected, somewhat lower than the increase of 0.5 percent in March.

“The strongest monthly price movements were once again observed for energy prices,” UniCredit economist Alexander Koch noted.

In addition to higher oil prices, the fact that the Easter holiday came later than normal this year likely affected prices in the leisure and entertainment sectors, Capital Economics economist Ben May added. Those sectors could thus see a correction next month. Final and detailed figures for April are due on May 11.

German inflation has exceeded 2.0 percent since January, breaching the European Central Bank’s medium term target of just below that level and explaining a decision by ECB policymakers to raise its main interest rate to 1.25 percent.

Economists expect the benchmark lending rate to reach 1.75 percent or even 2.0 percent by the end of the year.