German inflation slows to two-year low, as expected

German inflation dropped to its lowest level in over two years last month, according to final figures released Wednesday by the federal statistics office, as energy prices sank and food inflation slowed.

The annual rate of consumer price increases eased to 3.8% in October, according to Destatis, matching the initial estimate previously published and its lowest rate since August 2021.

This was a substantial slowdown from 4.5% the month before, and in line with economists' forecasts.

Energy prices were 3.2% lower than they were in October 2022, compared with a 1% annual rise in September, though Destatis pointed out that this was due to strong comparatives last year due to the war in Ukraine.

Annual food price inflation meanwhile, fell to 6.1% – a 20-month low and down from 7.5% in September and 9% in August.

Core inflation, which excludes volatile items like food and energy, remained stable at 4.3% and in line with estimates.

"Compared to the medium-term and long-term figures, the inflation rate remains high," said Ruth Brand, the Destatis president.