Germany's August inflation under 2% mark ahead of key ECB meeting. (picture alliance/dpa | Hannes P Albert)
For the first time in over three years, the German inflation rate remained below the 2% mark, as the Federal Statistical Office reported on Tuesday a preliminary 1.9% annual rise in consumer prices for August.
The figure falls two days ahead of a key European Central Bank (ECB) meeting on Thursday, when many ECB watchers are expecting the bank to cut rates. Lower German and eurozone inflation rates give the bank room to lower its rates. In the eurozone, the inflation rate for August was estimated at 2.2%.
In June, the ECB lowered its key interest rates by 0.25 percentage points for the first time since inflation started rising. In July, the ECB kept key interest rates stable and left the door open for a rate cut at Thursday's key meeting.
Detailed August data for Germany showed energy in particular was 5.1% cheaper than a year ago, while prices for services rose at an above-average rate of 3.9%. Food prices - often a complaint among residents - was only 1.5% more expensive. However individual items, such as olive oil have jumped in price.
The data shows that price pressure on consumers is easing after several years of very high inflation rates. As recently as July, statisticians had recorded a 2.3% increase in consumer prices after 2.2% in June.
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