German inflation: Still more relative than vigorous – ING

Carsten Brzeski, Chief Economist at ING, notes that with 2.3% year on year and 2.0% in August, the German headline inflation accelerated in September to its highest level since early 2011.

Key Quotes

“The HICP inflation came in at 2.2%, from 1.9%.”

“The increase in headline inflation, however, isn't so much the result of the ECB’s ultra-loose monetary policy but rather the result of higher energy and increased food prices in some states due to the hot and dry summer weather.”

“Today’s German inflation should further put ECB president Mario Draghi’s comments at the beginning of the week into perspective.”

“An increase in core inflation has been and currently still looks much more like wishful thinking than reality. Or to paraphrase Mario Draghi: with today’s German inflation data any pick-up in core inflation in the Eurozone still is much more relative than vigorous.”