BERLIN (Reuters) - German annual inflation picked up in October to reach its highest level in more than 6-1/2 years, data showed on Tuesday, supporting European Central Bank President Mario Draghi’s case for gradually winding down his unprecedented monetary stimulus.
German consumer prices, harmonized to make them comparable with inflation data from other European Union countries, rose by 2.4 percent year-on-year after an increase of 2.2 percent in the previous month, the Federal Statistics Office said.
That was the highest reading since February 2012 and in line with market expectations. The ECB targets inflation of close to but below 2 percent for the single-currency bloc as a whole.
On a non-harmonized basis, consumer price inflation even hit a 10-year high at 2.5 percent, the data showed.
Price pressures picked up on a broad basis, suggesting that the rise was also driven by core inflation and not only by the more volatile energy and food components. Germany’s preliminary inflation data do not include a figure for core inflation.
With price pressures building in the euro zone, the ECB last week confirmed its plan to end its 2.6 trillion euro ($2.96 trillion) bond-buying program at the end of this year and raise interest rates for the first time since 2011 sometime after next summer.
The euro zone will publish preliminary inflation data for October on Wednesday, with the headline figure expected to pick up to 2.2 percent after 2.1 percent in September.
The inflation figures chimed with data released earlier on Tuesday that showed Germany’s jobless total fell in October and employment hit a record high in September, underlining the strength of a labor market that is supporting a consumer-led upswing in Europe’s largest economy.
($1 = 0.8797 euros)
Reporting by Michael Nienaber; Editing by Michelle Martin and Maria Sheahan