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German inflation hits highest level since 2008

German inflation - ECB policymakers will take note
German inflation - ECB policymakers will take note

Inflation rose to 2.4% in Germany this month from 2.1 percent in March, according to provisional data released by the national statistics office. This is the highest inflation level since September 2008.

The result was in line with analyst expectations and reflects rising price pressures in the biggest European economy as it continues a strong recovery.

On a monthly basis, consumer prices gained 0.2%, the Destatis office reported, which was also what analysts had expected, somewhat lower than the increase of 0.5% in March.

Energy prices once again provided the strongest upward movements. In addition to higher oil prices, the fact that the Easter holiday came later than normal this year likely affected prices in the leisure and entertainment sectors and those sectors could see a correction next month.

German inflation has exceeded 2% since January, breaching the European Central Bank's medium term target of just below that level and explaining a decision by ECB policymakers to raise its main interest rate to 1.25%.

Economists expect the benchmark lending rate to reach 1.75% or even 2% by the end of the year.