Final Data Confirms Core Inflation Strength In August

Germany final inflation prints for August printed in line with flash readings. Headline CPI was +6.1% Y/Y and +0.3% M/M, while HICP was +6.4% Y/Y and +0.4% M/M.

• Core CPI printed 5.5% Y/Y for the second consecutive month (decelerating to 0.3% M/M from 0.4% in July, not seasonally adjusted).
• Final readings for core HICP series and special aggregates (energy, non-energy industrial goods, services) have not yet been released but likely also fell in line. The basically unrevised release would imply core HICP (ex-energy, food, alcohol and tobacco) confirmed at +6.3% Y/Y and +0.3% M/M - a 0.4pp sequential disinflation from the July print of +0.7% M/M but 0.1pp higher from 6.2% Y/Y.
• Notable HICP sub-component prints were:
• Electricity prices +15.5% Y/Y (vs +13.9% prior). As noted in our Inflation Insight for August, energy price rises were driven by base effects of a government energy relief package last year.
• Transport services +37.6% Y/Y as the final month of the 9-Euro transport ticket base effects push up core, the ending of which should contribute to significant September disinflation. A monthly fall in air and sea fares (-8.7% M/M and -8.4% M/M) meant transport services fell -2.5% M/M overall.
• Package holidays saw a sequential monthly step down to +1.6% M/M (vs 10.9% prior). The end of summer should reduce the impact that this components has on core inflation, following its large weighting change this year (1.5% of HICP basket in 2023 vs 0.7% in 2022).