German Inflation Jumps 2.2%, Surpassing ECB Target And Highest Since 2012

Tyler Durden's picture

Following a series of "hot" inflation prints from Germany's states, moments ago German inflation rose more than expected, printing at 2.2% above the 2.1% consensus estimate, up from 1.9% in January and surpassing the ECB's target of a rate just under 2 percent for the first time since August 2012, the peak of the Eurozone debt crisis.

With Germany headed for federal elections in September, the inflation figures will add more fuel to the debate about an end to the European Central Bank's loose monetary policy.

Earlier on Wednesday, preliminary data from several German states showed that consumer price inflation accelerated across the country, mainly driven by higher food, energy and transportation costs. In the most populous state, North Rhine-Westphalia, annual inflation rose to 2.3 percent from 1.9 percent in January. It reached 2.5 percent in Hesse, 2.2 percent in Baden-Wuerttemberg, 2.1 percent in Bavaria, 2.0 percent in Brandenburg and 2.4 percent in Saxony.

The state readings, which are not harmonised to compare with other euro zone countries, fed into the just as hot nationwide inflation print released moments ago. 

Yet not everyone was convinced Germany's blistering headline inflation would be a hindrance to the ECB. Cited by Reuters, Capital Economics analyst Jennifer McKeown said the state readings supported the forecast, but German core inflation, which strips out volatile energy and food costs, was likely to remain weak in the coming months.  "This should encourage the ECB to implement its asset purchases as planned," McKeown said.

That said, a sustained rebound in German inflation would give Bundesbank President and ECB rate setter Jens Weidmann more grounds to argue for a reduction in the ECB's bond-buying programme, a scheme that he has often criticised. The German central bank has warned that homes in large German cities are 15 to 30% overpriced, in a message that stoked further fears about the side-effects of the ECB's stimulus.

The inflation rate for the entire euro zone is expected to rise to 2.0 percent in February from 1.8 percent in January, economists polled by Reuters said. Those figures are due on Thursday.

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indygo55's picture

Who makes these bull shit numbers up? How can they measure inflation to the exact amount as that? And why do we need inflation at all? Oh that's right, we need to pay interest on the ever increasing amounts of debt fiat money that they are printing into oblivion. Sorry I forgot. 

Vardaman's picture

Every ivory tower economist's favorite metric: "A basket of goods no one actually buys, and we throw out anything that prevents us from getting the number we want..."  Something changed just recently.  I wonder what it is...

theliberalliberal's picture

Change what's in the basket

What inflation.

Sword of Troy's picture

That means the cost of feeding, clothing, sheltering, healing, nuturing, and containing (police action) to take care of all the millions of non-productive refugees will only go up. German debt will soar. Good plan from Merkel. That away to solve one crisis, is create 3 more.

Sandmann's picture

€35 billion on Defence.........€22 billion on "Merkel's Marauders" last year

digitlman's picture

Inflation = Theft.

Vageling's picture

So are many of these ridiculous taxes. NIRP as well.

andrej's picture

ECB's negative yield bond buying scheme is in fact pumping printed money into German economy. This is the result.


Sandmann's picture

Not sure it is. They cannot buy German Bonds as there is a shortage. Banks cannot lend - they simply do not find takers. Apart from mortgage debt and car loans I do not think Germany is booming in credit terms. When you see how people spend sparingly on food you detect stressed household budgets

Sandmann's picture

Energy Costs ? Of course EEG just kicked up higher. Wholesale Electricity prices are cratering and utilities are offloading generating sets but Retail Prices are soaring because of levies now 55% Consumer Price

Germany is beyond belief for energy costs and businesses and households will have to move eastwards to Poland and Czech Republic

Vageling's picture

Wait till they introduce the clean water scam. Watermeters and shit. I'm surprised they haven't introduced oxygen tax yet. Pay more, receive less. Ruling formula nowadays.

silverer's picture

Uh oh. Muslim immigrants need to eat. There's always head cheese.

HenryKissingerChurchill's picture

I wonder if Housing is part of those misterious calculations?

Joe A's picture


About these German carnaval parade wagons with anti Trump messages: here is one they don't show you. To indicate that there are others as well:

Vageling's picture

LoL! Hardly see GS anymore. Hardly read the comments. Most are there still. But shit changed. I got banned on pow which also means ban on there. Mwah. Nice to know they still got it. Dropped it when it became political. Nice experiment but feasible?