German inflation rebound confirmed for June

German inflation rose in June, official final data confirmed on Tuesday, after a series of falls in previous months.

Consumer prices increased by 6.8% year on year, the federal statistics office said on Tuesday. The core inflation rate, which excludes items such as food and energy, was 5.8% in June, up from 5.4% in May.

The rebound in inflation midway through the second quarter was almost exclusively due to base effects from last year’s temporarily-reduced rail fare, which pushed up the core rate.

The German government last year cut taxes on fuel to counter spiralling energy prices and introduced a public transport ticket allowing travel across the country for €9 a month, causing inflation to dip.

"All told, we continue to see a decline in German headline inflation over the coming months, as energy and food inflation roll over but the core rate will keep a floor under the headline’s slide to August," said analysts at Pantheon Macroeconomics.

"We then look for a big drop in September as underlying disinflation in goods and services hit the data more meaningfully, in line with the surveys."

Reporting by Frank Prenesti for Sharecast.com