BERLIN, Oct 23 - German inflation probably edged up in October as oil prices rose, regional data showed on Thursday, but analysts said they did not see major price pressures emerging in Europe's largest economy. Data from most major federal states pointed to a pan-German inflation rate of 1.2 percent in October, up from 1.1 percent in September. Month-on-month, prices are likely to have been unchanged, compared with a 0.1 percent drop in September. "We don't see any real pressure on consumer prices, either from above or below at the moment," said Lothar Hessler, an economist at Trinkaus & Burkhardt in Duesseldorf. Germany is the second of the 12 euro zone countries to report consumer price data for October after data from Italian cities on Wednesday showed inflation there probably rose 0.1 percent month-on-month, the slowest rate in eight months. The Italian data indicated annual inflation at 2.6 percent, the lowest year-on-year rate since February, analysts said. Italy's statistics office is due to issue a first official estimate of Italian inflation on October 30.
Euro zone inflation was unchanged at 2.1 percent in September, EU statistics office Eurostat said last week. The European Central Bank has said it expects inflation in the euro zone to hover around its two percent tolerance ceiling for the rest of the year but ease in 2004. "Our expectation is that inflation will be declining below two percent next year and we do not see at this moment a rebound," ECB board member Tommaso Padoa-Schioppa said on Saturday. ECB policymakers said on Thursday they were increasingly confident recovery was in place allowing euro zone interest rates to stay on hold, although they remained cautious about the economy's strength. Data from the states of Brandenburg, Bavaria, Baden-Wuerttemberg and Hesse showed energy prices had risen, offsetting drops in the price of package holidays that usually lead to month-on-month price drops in October. In contrast, North Rhine-Westphalia reported consumer prices there easing slightly as seasonal food and petrol pump prices outweighed a rise in the cost of heating oil.
They were the first of six major German states to report data used to calculate a preliminary inflation figure for the whole of Germany. Saxony, the last state to report, said it will publish its data around 0800 GMT on Friday. Volker Nitsch of Bankgesellschaft Berlin said he was surprised the end of the holiday season had not led to a slight reduction in prices. "The only surprising thing about the October level is that there has been no price decline from September," he said. "You usually get prices falling because budget holidays get cheaper. This time energy prices and heating oil rose to compensate."//