Tuesday, November 27, 2007

German inflation hits a 13 year high

If only Germany could leave the ECB....

FRANKFURT (AFP) — German inflation reached its highest level since 1994 in November, spiking to 3.0 percent according to provisional data released Tuesday. On top of rising oil prices, the soaring cost of food items such as dairy products and cereals pushed inflation sharply higher as the country approaches the start of winter.

While the trend of rising prices is similar in other eurozone countries, German inflation is the first to reach the symbolic 3.0 percent threshold, exceeding a consensus analyst forecast of 2.8 percent. The rise in consumer prices comes amid signs of slowing economic growth in Germany, the biggest economy in the eurozone, and presents the European Central Bank with "quite a challenge," UBS economist Martin Lueck noted.