German Inflation Edges Higher Amid Energy Price Pressures
Germany's inflation rate rose to 2.9% in August, surpassing expectations and strengthening the case for an interest rate hike by the European Central Bank (ECB) next month.
The annual increase was driven by energy costs, with prices jumping due to a lack of progress on Middle East peace deals. Meanwhile, services and food inflation eased slightly.
According to Bloomberg, this is the highest reading since April and above the median estimate of 3.1% in a recent survey.
The ECB has already lifted borrowing costs once and is set to do so again on September 10. Traders are betting on further tightening next year.
Slovenian Governing Council member Primoz Dolenc stated that 'the arguments are there' for a September move, referring to the need for monetary policy to be mildly restrictive.