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German states' monthly data hint at higher annual CPI
BERLIN Aug 29 (Reuters) - Annual inflation accelerated in five out of six German states in August, putting all but one of their inflation rates above a headline forecast for the pan-German figure and pointing to an increase in price pressures in Europe's largest economy.
Higher fuel and heating oil prices were behind the pick-up in inflation, data from the states' statistics offices showed.
Year-on-year inflation picked up most sharply in Hesse, with consumer prices up 2.3 percent, climbing above the European Central Bank's key 2 percent euro zone threshold for the first time since February.
In the eastern state of Saxony annual inflation picked up to 2.1 percent from 1.8 percent last month, overstepping the 2 percent level for the first time since March. In Brandenburg price pressures increased by 2.0 percent on the year after remaining below this level for the last two months.
In North-Rhine Westphalia (NRW), Germany's most populous state, the cost of living accelerated to 1.9 percent after holding steady at a 20-month low of 1.3 percent in July.
The data from NRW, which is home to around 18 million of Germany's 82 million inhabitants, suggests Germany's overall preliminary inflation figure will also rise in August after remaining at an 18-month low of 1.7 percent in July.
Germany's overall preliminary inflation figure, due out later on Wednesday, is based on data from six of Germany's 16 states that together account for more than half of the country's population
A Reuters poll of 31 economists conducted before state data was released pointed to a 1.8 percent year-on-year increase in consumer prices, up from last month but below the 2 percent threshold above which it remained for much of last year before falling below this level in May.
On a monthly basis consumer price growth held steady in two states and slowed in three states.
A Reuters poll of 29 economists conducted before the state data was published had forecast consumer prices would rise by 0.2 percent nationwide on a monthly basis compared with a 0.4 percent gain last month.
An increase in pan-German price pressures would put a dampener on hopes that domestic demand will prop up Germany's traditionally export-driven economy as shipments abroad falter in the face of the euro zone debt crisis and a slowdown in global demand.
But a pick-up in inflation is unlikely to worry the German government or central bank, both of which have hinted they would tolerate higher prices in Germany as long as euro-wide inflation remains under control in a move that could help struggling euro zone countries boost their competitiveness.
An alternative measure of inflation, based on Europe's harmonised index of consumer prices (HICP) favoured by the ECB, is forecast to accelerate to 2.0 percent on the year from 1.9 percent in July but slow to 0.1 percent on the month from 0.4 percent last month.
(Reporting by Michelle Martin)
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