MNI BRIEF: Germany Inflation Slows From November Highs

German inflation slowed in December but remains at elevated levels, sitting just below the multi-decade high seen In November. Annual inflation slowed to 5.7% on an EU harmonised reading, modestly lower than the 6.0% seen in the previous month. National German CPI actually edged higher on a preliminary reading, rising to 5.3% from November's 5.2%.

The deceleration in prices underlines somewhat comments from ECB governing council members ahead of Christmas, who suggested we may now be at the peak of eurozone price rises. President Christine Lagarde told the last post-policy meeting press conference that "inflation is expected to remain elevated in the near term, but we expect it to decline in the course of next year."

The easing of prices in Germany was helped by lower energy costs through the month and could point to a modestly lower outturn when pan-euro area flash inflation data is published Thursday. Annual inflation is expected to dip to 4.8%, with modest increases in Spain and Italy still offering some upward pressure.