BERLIN (Reuters) - Germany’s annual consumer price inflation accelerated by more than expected in July, rising further above the European Central Bank’s target of close to but below 2%, the Federal Statistics Office said on Thursday.
Consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose by 3.1% in July, compared with 2.1% in June. The July figure compared with a Reuters consensus forecast for a reading of 2.9%.
“A base effect due to the corona(virus)-induced reduction in VAT rates in July 2020 is, in particular, responsible for the further increase in the inflation rate in July 2021,” the Statistics Office said in a statement. “Since January 2021, VAT rates for almost all goods and services have been back at the previous level.”
Writing by Paul Carrel; Editing by Madeline Chambers