Germany's inflation rate accelerated at the fastest pace in three and a half years in January, the country's official statistics office said Monday, amid a surge in energy prices.
Consumer prices in Germany, Europe's biggest economy, rose at an annual 1.9% pace this month, Destatis said, up from 1.7% in December and the fastest rate since July 2013. The rate also falls largely in-line with the European Central Bank's definition of price stability of "just below 2%".
The figures are likely to fuel even more debate over the ECB's loose monetary policy and will likely elicit further calls from Germany's Bundesbank to withdraw some of the central bank's non-standard measures -- such as the -0.4% rate it applies to its deposit facility -- and unwind its €1.5 trillion quantitative easing program.
The European single currency, which had been trading at around 1.0641 against the U.S. dollar prior to the release, weakened to 106.28 immediately afterwards, although that move must be placed in the context of a stronger greenback, which has been rising most of the session against major global currencies.
Eurostat, the region's statistics office, will publish its flash estimate for currency area inflation Tuesday at 10:00 GMT, with analysts anticipating a reading of 1.7%. Annual Eurozone inflation was confirmed at a 3.5 year high of 1.1% last month thanks to a crude-oil induced spike in energy and a rise in food and alcohol prices. So-called core inflation, however, which strips out many of these volatile components, were largely stable at 0.9%.
