Germany’s inflation rate is expected to be 2.8 percent in October, down from 3.3 percent in September, the Federal Statistical Office said. Consumer prices fell 0.2 percent on the month. The harmonised index also rose 2.8 percent on the year and fell 0.1 percent on the month.
The easing is broad at the core. Inflation excluding food and energy is expected at 2.1 percent, down from 2.4 percent in each of the previous three months. Services inflation slowed to 2.5 percent from 2.7 percent, goods inflation to 3.0 percent from 3.8 percent, and food inflation held at 0.4 percent. Energy remained the outlier, up 12.2 percent on the year, though that is a slower rise than September’s 14.9 percent.
Growth held up at the same time. GDP rose 0.2 percent in the third quarter after price, seasonal and calendar adjustment, following increases in the first half of the year, and was up 1.3 percent on the same quarter a year earlier. Final consumption expenditure increased slightly, while capital formation declined and the very dynamic export trend of the first half slowed noticeably.
Set against the rest of the bloc’s October prints, Germany is the disinflationary case: France at 3.4 percent, Spain at 4.9 percent and Italy at 5.4 percent all sit above it, and all three are energy driven. The ECB sets one rate for all of them, and the German data are the strongest evidence that the shock is a relative price shift in specific markets rather than a bloc wide wage price process.