German inflation unchanged in February

Consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 1.6% year-on-year

  
German retailer Metro AG sign is seen on the steps of their headquarters in Duesseldorf, Germany March 02, 2018.

German retailer Metro AG sign is seen on the steps of their headquarters in Duesseldorf, Germany March 02, 2018.

REUTERS/Thilo Schmuelgen

BERLIN- Germany's annual consumer price inflation held steady in February, the Federal Statistics Office said on Monday.

Consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 1.6% year-on-year after increasing by the same amount in January. February's preliminary data was in line with a Reuters forecast.

The European Central Bank targets an inflation rate of below but close to 2% across the euro zone. Annual inflation for the euro area registered 0.9% in January. 

A German national measure of inflation rose in February to 1.3% from 1.0% a month earlier.

Carsten Brzeski, economist at ING, said German inflation could rise to between 3% and 4% and euro zone inflation could breach the 2% level later this year, pushed up by higher energy prices and price markups as economies reopen.

"Consequently, the ECB could still be forced into new action," he added.

Financial markets took fright last week that higher inflation, fuelled by economic recovery, might prompt central banks to tighten monetary policy. Policymakers have played down that threat. 

On Friday, Greece's Yannis Stournaras became the first European Central Bank policymaker to openly call for increasing the pace of ECB bond purchases to stem a rise in borrowing costs. 

(Reporting by Paul Carrel, Michael Nienaber and Thomas Escritt; Editing by Nick Macfie) ((thomas.escritt@thomsonreuters.com; +49 30 2201 33579 ;))

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