German Inflation Falls More Than Expected to 2.8%

Germany’s annual inflation rate slowed to 2.8% in October from 3.3% in September, below forecasts, while consumer prices fell 0.2% month over month after rising 0.6% the previous month. The euro-area-comparable HICP also eased to 2.8% year over year, and core inflation declined to 2.1% from 2.4%; services and goods inflation moderated, while food inflation was steady. The slowdown was reflected across several major German states, though energy prices continued to rise and remain a risk to the outlook. The softer figures may influence expectations for European Central Bank policy, with the bank having held rates steady while signaling that higher energy costs could still prompt a December increase.