BERLIN (Reuters) - German inflation accelerated more quickly than expected in November, the Federal Statistics Office said, as the economy and labor market boomed -- supported by loose euro zone monetary policy -- and food and fuel costs rose.
Earlier figures showing rising prices in Germany’s regions had already prompted investors push up German borrowing costs in the expectation that this would lead the European Central Bank to reduce stimulus.
Strong growth in the prices of energy and food helped lift the inflation rate to 1.8 percent, ahead of the 1.7 percent expected by analysts polled by Reuters, and substantially faster than the 1.5 percent price growth seen in October.
The numbers, harmonized to make them comparable with inflation figures from other European Union countries, showed prices up 0.3 percent month-on-month, ahead of the 0.2 percent forecast.
German 10-year government bond yields DE10YT=TWEB were 2 basis points higher at 0.36 percent and most other euro zone bond yields were also higher by 1-2 basis points on the day.
Figures reported by individual German states’ statistics offices showed food, fuel and transport costs all making strong contributions to overall price increases. The state readings are not harmonized to compare with other euro zone countries.
The inflation rate for the entire euro zone, due on Thursday, is expected to have risen to 1.6 percent in November from 1.4 percent in October, economists polled by Reuters said.
In Spain, the euro zone’s fourth-largest economy, EU-harmonized consumer prices rose by 1.7 percent year-on-year in November, flash data from the National Statistics Institute (INE) showed on Wednesday.
This was below a Reuters poll of 1.9 percent and unchanged from October. The data also showed Spain’s national consumer price index rose by 1.6 percent in November on an annual basis, also unchanged from October.
Reporting by Thomas Escritt; Editing by Toby Chopra