The annual rate of inflation in Germany slowed for the third straight month in May, increasing the threat of deflation in the eurozone's largest economy. Consumer prices fell 0.2pc in May from April, and were up 0.7pc year-on-year, according to final figures from the statistics office. In April, the annual rate of inflation stood at 1.0pc, down from 1.2pc in March and 1.3pc in February.
Earlier this week, Bundesbank chief economist Hermann Remsperger said deflation was unlikely to take hold in Germany, but he added that the bank was closely watching the risk factors. The decline in the German consumer price index in May from April was mainly attributable to a decline in prices for mineral oil products, according to the statistics office. Excluding heating oil and motor fuel, the index would have remained unchanged on April. Inflation in the eurozone has eased in recent months due to falling oil prices and weakening demand for goods. EU statistics office Eurostat estimated last week that eurozone inflation eased to 1.9pc in May from 2.1pc in April. //www.fxcentre.com