BERLIN, Aug 27 (Reuters) - Price pressures picked up in August in four German states, suggesting negative inflation rates in Europe's largest economy and the euro area are retreating.
Official data showed that prices rose compared with the previous month in North Rhine-Westphalia, Saxony, Hesse and Brandenburg, bucking expectations for prices to be unchanged nationally on the month.
Figures from the German states offer some of the first insights into price developments in the euro zone.
A preliminary Reuters poll had expected prices in the 16-nation currency bloc to fall by 0.4 percent year-on-year in August after a 0.7 percent drop in July.
The Federal Statistics Office uses figures from six states to calculate a preliminary inflation figure for Germany. ***************************************************************
STATE M/M Y/Y INDEX LINK TO FULL TABLE
SAXONY +0.1 -0.1 108.3
NRW +0.3 unch 106.9
BRANDENBURG +0.1 -0.2 107.0
HESSE +0.3 -0.3 106.9
BAVARIA expected later on Thursday
BADEN-WUERTT. expected later on Thursday
ECONOMIST COMMENT
MATHIAS TREML, LBBW
'We expect that inflation will be slightly positive again by November at the latest...The basis effects that strongly reduced inflation rates until July, are slowly expiring.'
CHRISTOPH WEIL, COMMERZBANK
'The rise is clearly coming from energy prices. Even if all prices remained constant in the next months, we'd see a rise in annual inflation because of the energy component.
'Euro zone inflation rates will clearly rise in the coming months.
EXPECTATIONS
The mid-range forecast in a Reuters poll of economists was for both the pan-German consumer price index (CPI) and the EU-harmonised price index (HICP) to show no change on the month. On the year, CPI was seen falling 0.2 percent and HICP seen declining 0.4 percent.
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BACKGROUND
* The six states' weights in the preliminary consumer price index vary depending on their correlation with past national data. The states' weights in the final consumer price index, always released around two weeks after the preliminary data, are fixed as follows: North Rhine-Westphalia 23.5 percent, Bavaria 15.4 percent, Baden-Wuerttemberg 13.5 percent, Hesse 7.3 percent, Saxony 4.6 percent, Brandenburg 2.7 percent. Keywords: GERMANY INFLATION/ (Berlin newsroom; Tel: +49 30 2888 5142; Email: berlin.econ@news.reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Official data showed that prices rose compared with the previous month in North Rhine-Westphalia, Saxony, Hesse and Brandenburg, bucking expectations for prices to be unchanged nationally on the month.
Figures from the German states offer some of the first insights into price developments in the euro zone.
A preliminary Reuters poll had expected prices in the 16-nation currency bloc to fall by 0.4 percent year-on-year in August after a 0.7 percent drop in July.
The Federal Statistics Office uses figures from six states to calculate a preliminary inflation figure for Germany. ***************************************************************
STATE M/M Y/Y INDEX LINK TO FULL TABLE
SAXONY +0.1 -0.1 108.3
NRW +0.3 unch 106.9
BRANDENBURG +0.1 -0.2 107.0
HESSE +0.3 -0.3 106.9
BAVARIA expected later on Thursday
BADEN-WUERTT. expected later on Thursday
ECONOMIST COMMENT
MATHIAS TREML, LBBW
'We expect that inflation will be slightly positive again by November at the latest...The basis effects that strongly reduced inflation rates until July, are slowly expiring.'
CHRISTOPH WEIL, COMMERZBANK
'The rise is clearly coming from energy prices. Even if all prices remained constant in the next months, we'd see a rise in annual inflation because of the energy component.
'Euro zone inflation rates will clearly rise in the coming months.
EXPECTATIONS
The mid-range forecast in a Reuters poll of economists was for both the pan-German consumer price index (CPI) and the EU-harmonised price index (HICP) to show no change on the month. On the year, CPI was seen falling 0.2 percent and HICP seen declining 0.4 percent.
MARKET REACTION
For any foreign exchange market reaction click on
For any bond market reaction click on
BACKGROUND
* The six states' weights in the preliminary consumer price index vary depending on their correlation with past national data. The states' weights in the final consumer price index, always released around two weeks after the preliminary data, are fixed as follows: North Rhine-Westphalia 23.5 percent, Bavaria 15.4 percent, Baden-Wuerttemberg 13.5 percent, Hesse 7.3 percent, Saxony 4.6 percent, Brandenburg 2.7 percent. Keywords: GERMANY INFLATION/ (Berlin newsroom; Tel: +49 30 2888 5142; Email: berlin.econ@news.reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.