Inflation soars in key German regions

FRANKFURT – Inflation has jumped in four key German regions, anticipating a overall surge of prices in the eurozone’s biggest economy, data released yesterday showed.

Consumer prices jumped by 2,6 per cent in the eastern German region of Saxony, following a rise of two per cent in August, a statement said. It was the biggest increase since June 2006, the region said.On Wednesday, Germany’s most populated region, North Rhine-Westphalia, said consumer prices had also surged by an annualised 2,6 per cent in September, the biggest rise there in six years.The sharpest increases by category in those states were for food and clothing, the regional statistics offices found.At IXIS-CIB, analyst Sylvain Broyer was surprised by the price rises for clothing and shoes, which he noted were “unusual at this point in the year.”Germany’s federal statistics office Destatis bases its inflation forecast on those two states along with four others, three of which are in former west Germany and one in the east.In the eastern region of Brandenburg, inflation climbed by 2,4 per cent in September, a sharp rise from the 12-month rate of 1,9 per cent in August.And in western Hesse, prices which had gained 1,6 per cent in August shot up by 2,3 per cent this month, with motor and heating fuel showing the biggest increases.The figures bore out comments by German central bank governor Axel Weber, who acknowledged recently that he had “some concerns” about rising prices and forecast that inflation could grow by more than two per cent nation-wide.Broyer expected German inflation to accelerate from 2,0 to 2,7 per cent when calculated using a harmonised eurozone standard and said it would likely “bring (overall) eurozone inflation up from 1,7 per cent to 2,2 per cent in September.”That would exceed the 2,0 per cent limit fixed by the European Central Bank, which would in normal times consider measures to check price rises, such as raising interest rates.That option is not currently available however, owing to the euro’s rise to record heights against the dollar, which is expected to curb eurozone economic growth and has sparked insistent calls from French President Nicolas Sarkozy for an interest rate cut.Nampa-AFPIt was the biggest increase since June 2006, the region said.On Wednesday, Germany’s most populated region, North Rhine-Westphalia, said consumer prices had also surged by an annualised 2,6 per cent in September, the biggest rise there in six years.The sharpest increases by category in those states were for food and clothing, the regional statistics offices found.At IXIS-CIB, analyst Sylvain Broyer was surprised by the price rises for clothing and shoes, which he noted were “unusual at this point in the year.”Germany’s federal statistics office Destatis bases its inflation forecast on those two states along with four others, three of which are in former west Germany and one in the east.In the eastern region of Brandenburg, inflation climbed by 2,4 per cent in September, a sharp rise from the 12-month rate of 1,9 per cent in August.And in western Hesse, prices which had gained 1,6 per cent in August shot up by 2,3 per cent this month, with motor and heating fuel showing the biggest increases.The figures bore out comments by German central bank governor Axel Weber, who acknowledged recently that he had “some concerns” about rising prices and forecast that inflation could grow by more than two per cent nation-wide.Broyer expected German inflation to accelerate from 2,0 to 2,7 per cent when calculated using a harmonised eurozone standard and said it would likely “bring (overall) eurozone inflation up from 1,7 per cent to 2,2 per cent in September.”That would exceed the 2,0 per cent limit fixed by the European Central Bank, which would in normal times consider measures to check price rises, such as raising interest rates.That option is not currently available however, owing to the euro’s rise to record heights against the dollar, which is expected to curb eurozone economic growth and has sparked insistent calls from French President Nicolas Sarkozy for an interest rate cut.Nampa-AFP