Germany’s small rise in inflation, which reinforces the ECB’s interest rate hike

The modest rise in inflation in Germany on 31 August further reinforced the European Central Bank ' s rationale for the next month ' s interest rate hike. Consumer prices increased by 2.9 per cent in August over the same period, up from 2.8 per cent in the previous month, reaching their highest level since April, but below the estimated average of 3.1 per cent for analysts. As peace agreements in the Middle East remain elusive, energy prices have again become a major driver of inflation, while services and food prices have fallen. Previously, data from France and Spain also showed that the rise in hydrocarbon prices was pushing inflation across the region, increasing pressure on the ECB to act. The ECB officials had already raised the interest rate once before and were expected to do so again on 10 September. Traders bet that monetary policy will be further tightened next year。