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Germany’s inflation accelerated more-than-expected in July, particularly due to the base effect, flash data from Destatis revealed on Thursday.

Consumer price inflation accelerated to 3.8 percent in July from 2.3 percent in June. The rate was above economists’ forecast of 3.3 percent.

The increase in inflation was caused by a base effect, as the value-added tax rates were temporarily reduced in July 2020 on account of the coronavirus crisis.

In July, goods prices were up 5.4 percent and services costs increased 2.2 percent from last year.

On a monthly basis, consumer prices grew 0.9 percent, much faster than the expected rate of 0.5 percent. Final results for July will be published on August 11.

The harmonized index of consumer prices, which is meant for EU comparison, advanced 3.1 percent, following a 2.1 percent rise in June. The rate was above economists’ forecast of 2.9 percent.

Month-on-month, the HICP gained 0.5 percent versus 0.4 percent rise in June. The rate matched economists’ expectations.


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