German final October HICP was unrevised from the flash readings at 2.4% Y/Y (1.8% prior) and +0.4% M/M (-0.1% prior). The final reading to CPI was also unrevised at 2.0% Y/Y (1.6% prior) and 0.4% M/M (0.0% prior). Core CPI printed at +2.9% Y/Y (2.7% prior) in its first uptick since June 2023.
- Overall, the data shows the uptick in October was quite broad-based: while around half the upward contribution vs September came from energy (and another quarter from food), also services contributed 0.08pp more than before. Only the core goods categories remained largely unchanged in their contribution to headline Y/Y.
- The services subcategories were broadly a bit firmer than before, as projected by MNI after state-level data. Out of the 0.04pp contribution increase in recreation and culture, 0.02pp came from (volatile) package holidays. Details see table.
- Looking ahead, energy base effects should push up German headline inflation further during the last two months of the year. Regardless, developments within core / services remain central to ECB policymaking.
MNI’s inflation breadth tracker (see chart below) shows disinflation further reversing in the low-inflation categories in October, with the percentage of ECOICOP (European classification of individual consumption according to purpose, a standardized category split) items printing at or below 2% falling to 50.6% from 52.4% in September. In the high-inflation categories, disinflation also stalled, with the percentage of categories above 6% increasing to 11.4% from 10.3% in September.
