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German HICP slows to +5.7% Y/Y, higher than expectations

GERMAN DATA
MNI (London)

GERMANY DEC FLASH HICP +0.3% M/M, +5.7% Y/Y; NOV +6.0% Y/Y

GERMANY DEC FLASH CPI +0.5% M/M, +5.3% Y/Y; NOV +5.2% Y/Y

  • Flash headline inflation rose marginally to 5.3% y/y from 5.2% y/y in November, whilst the flash HICP reading showed what could be initial signs of peaking, coming in at 5.7% y/y in December from 6.0% y/y in November.
  • Both rates were above optimistic market expectations of 5.1% y/y and 5.6% y/y respectively.
  • Monthly headline CPI increased to 0.5% m/m (0.4% forecasted) from November’s reading of -0.2% which saw the first (and likely only) deflationary movement of 2021. The monthly HICP estimate remained unchanged from November at 0.3% m/m.
  • Energy prices slowed to 18.3% y/y from 22.1% y/y in November.
  • Food and service prices continued to rise, with food in particular up 6.0% y/y from 4.5% y/y in November.
  • Germany’s inflation data doesn’t quite confirm that inflation has peaked, but underlines comments from ECB officials that we may be near the top.

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