German and Euroland Inflation

May 15, 2008

In April, consumer prices in Euroland went up 0.3%, with energy rising 1.0% but both non-energy and core, which excludes energy and unprocessed food, edging up just 0.2%. The twelve-month rate of CPI climb settled back to Feb’s 3.3% from 3.6% in March. On-year German inflation of 2.4% was down from 3.1% in March and at an eight-month low. Non-energy consumer prices in Germany increased 1.5% saar in the six months between October and April. Commodity prices, however, remain under upward pressure. There are some signs of more generous wage awards, and the ECB does not believe in guiding monetary policy by a sub-set designated core portion of consumer prices. More likely than not, officials will raise, not reduce, projected 2008 and 2009 inflation when new staff forecasts get released in early June.



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