FLEE - German Inflation Drops To Its Lowest Level Since June 2021

2024-01-31 09:45:00 ET

Summary

• The drop in German inflation will fuel speculation about an early ECB rate cut, but underneath a favourable headline number, there are still plenty of price pressures to worry about.
• Today’s drop in headline inflation is mainly the result of favourable energy base effects.
• At first glance, the drop in headline inflation, not only in Germany but also in France, could give rise to further speculations about an ECB rate cut already in Spring.

By Carsten Brzeski

According to the just-released flash estimate, German inflation has dropped significantly again, with the January headline number coming in at 2.9% year-on-year, from 3.7% YoY in December. It's the lowest level since June 2021. The European inflation measure came in at 3.1% YoY, from 3.8% in December....

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