Germany’s inflation rate fell to its lowest point since June 2021, confirming the second estimate released on Tuesday. Inflation eased to 2.0% in August, supported by a decline in energy prices, which fell by 5.1% compared to the same month last year. This decline could pave the way for the European Central Bank (ECB) to cut interest rates this week.
In July, German consumer prices, harmonized for comparison with other EU countries, had risen by 2.6% year-on-year. Core inflation, excluding volatile food and energy prices, also saw a slight drop to 2.8% in August, down from 2.9% the previous month.
While energy costs decreased, food prices continued their upward trend for the fifth consecutive month, rising 1.5% year-on-year in August. The rise in service prices was also notable, increasing by 3.9% compared to the previous year, far outpacing the overall inflation rate.