Germany’s inflation rate increased to 2.9% year-on-year in August, up from 2.8% in July, according to preliminary data released by the federal statistics office on Monday.
Energy prices surged 10.5% year-on-year, accelerating from an 8.3% rise in July, as geopolitical tensions in Iran drove up fuel costs. Core inflation, which excludes volatile food and energy prices, remained unchanged at 2.4% month-on-month.
The acceleration in headline inflation exceeded the 3.1% forecast by Reuters-polled economists, who had expected a sharper increase. The German government’s latest projections anticipate average inflation of 2.7% this year and 2.8% in 2027.
Euro zone inflation figures are scheduled for release on Tuesday. Economists surveyed by Reuters project the bloc’s consumer prices rose 3.3% in August, up from 2.9% in July. The data follows reports that European Central Bank policymakers are prepared to raise interest rates at their September meeting to mitigate inflationary pressures linked to the conflict in Iran. However, sources cited by Reuters indicated limited inclination to signal additional tightening beyond that decision.
The divergence between headline and core inflation underscores the persistent impact of energy price volatility on broader price stability in the euro area.
