Germany’s annual inflation rate edged up to 2.9% in August 2026, its highest level since April, but below market expectations of 3.0%, according to preliminary estimates. The increase was driven by a renewed surge in energy inflation, which accelerated to 10.5% from 8.3% in July following heightened US-Iran tensions and higher crude oil prices. Meanwhile, services inflation eased to 2.8% from 2.9%, while food inflation slowed to 0.1% from 0.4%. Core inflation, excluding energy and unprocessed food, was unchanged at 2.4%. The EU-harmonized inflation rate also rose to a four-month high of 2.9%, below forecasts of 3.1% but still well above the ECB’s 2.0% target.