German inflation confirmed at highest level since October 2014

German inflation was confirmed at a two-year high in October, according to data from Destatis.

Consumer prices last month rose 0.2% from September and 0.8% from October last year, which is its highest level since October 2014. This was in line with consensus and the original estimate.

Energy prices fell 1.4% from October 2015, while food prices were unchanged.

In the European Union, consumer prices were up 0.2% on the month and 0.7% compared to October 2015.

Pantheon Macroeconomics said: “German inflation pressures are steadily rising. Inflation last month was pushed higher by continued easing of deflation in energy prices. Transport prices, in particular, have rebounded strongly. Inflation in this sector rose to 1.2% year-over-year from 0.2% in September. Household energy prices, however, fell 2.3% less than the 3.7% decline the month before. This trend likely will continue in coming months, and peak in Q1.

“Core inflation dipped to 1.1% from 1.2% in September, mainly due to a fall in the volatile leisure services index. We expect a rebound in November, and a gradual increase in core inflation in coming months. Rent prices are key to watch. Inflation here rose to 1.4% from 1.3% in September, and likely will push higher too.”