BERLIN, Aug 25 - Annual inflation ticked higher in Europe's biggest economy in August on the back of higher energy costs, latest German state figures showed on Monday, prompting fears that euro zone inflation could also be on the increase. The industrial state of North Rhine-Westphalia -- the last of six states to report data used to compile a preliminary pan-German inflation rate -- said prices rose 0.1 percent month-on-month and 1.2 percent year-on-year.
Compared to July, Bavarian consumer prices fell 0.1 percent while they were unchanged in Brandenburg, but year-on-year they rose 1.3 percent in Bavaria and 1.2 percent in Brandenburg. "The main factor behind this development was higher energy prices," Commerzbank said in a research document. Analysts say that if developments in German consumer prices were mirrored elsewhere then euro zone inflation could rise above the European Central Bank's two percent ceiling in August although it was too early to say for sure. Fuel costs in Bavaria rose 2.3 percent month-on-month, in Brandenburg they rose 1.2 percent versus July and in North Rhine-Westphalia they were up 2.4 percent month-on-month and 4.4 percent compared to August last year.
Package holiday prices and the cost of vacation lodgings also rose as many German states' school holidays overlapped. The price of package tours in Bavaria, Brandenburg and North Rhine-Westphalia was up 3.6 percent compared to July. The euro's rally earlier this year helped keep down import and consumer prices but the dollar's recent recovery and a pick up in crude oil prices means import prices are on the increase. German import prices rose in July by 0.2 percent compared with June, federal statistics office data showed on Monday.
INFLATION ON THE UP AGAIN?
Prior to the states' data, the consensus forecast for the country as a whole in a poll of 15 analysts was for a fall of 0.1 percent month-on-month in consumer prices. Year-on-year, the expection was for a rise of 1.0 percent. Pan-German consumer prices in July rose 0.2 percent month-on-month and 0.9 percent year-on-year. The pan-German preliminary figure for August was expected later on Monday. Figures from Italy last week showed inflation there also unexpectedly crept higher in August, due to costlier petrol and hotel rooms. The Italian and German data provide a first snapshot of euro zone inflation trends in August. The EU statistics office Eurostat is due to release an estimate for August on August 29. The European Central Bank said in its August monthly report that food and oil prices could create some "temporary volatility" in prices "but beyond the short term the outlook continues to be favourable".//