Germany inflation rises to 2.9% on energy costs

Germany’s inflation rate rose to 2.9% in August from 2.8% in July, preliminary figures from statistics agency Destatis showed Monday, as energy costs increased.

Energy prices in Europe’s biggest economy rose 10.5% overall. Food and services inflation eased slightly.

The increase came as the war against Iran and the near-total closure of the Strait of Hormuz, a key energy trade route, pushed up global energy costs.

The European Central Bank is due to meet on September 10 after pausing rate rises in July. Eurozone inflation stood at 2.9% in July, above the ECB’s 2% target.

“With oil prices remaining elevated and the risk of a fresh gas price shock increasing, most ECB policymakers are likely to see the case for another rate hike,” ING economist Carsten Brzeski said. He added that the eurozone economy had shown “an almost unexpected resilience to the war in the Middle East”.