| BERLIN, March 1
BERLIN, March 1 German inflation probably picked
up in February, surpassing the European Central Bank's target of
a rate just under 2 percent for the first time in more than four
years, regional data suggested on Wednesday.
With federal elections set for September in Germany, the
inflation figures are likely to fuel debate about an end to the
European Central Bank's loose monetary policy.
Preliminary data from several German states showed that
consumer price inflation accelerated across the country, mainly
driven by higher food, energy and transportation costs.
In the most populous state, North Rhine-Westphalia, annual
inflation rose to 2.3 percent from 1.9 percent in January. It
reached 2.5 percent in Hesse, 2.4 percent in Saxony, 2.2 percent
in Baden-Wuerttemberg, 2.1 percent in Bavaria and 2.0 percent in
The state readings, which are not harmonised to compare with
other euro zone countries, will feed into nationwide inflation
data due at 1300 GMT.
A Reuters poll conducted before the release of the regional
data suggested overall consumer price inflation rose to 2.1
percent in February from 1.9 percent in January, the highest
rate since September 2012.
Capital Economics analyst Jennifer McKeown said the state
readings supported the forecast, but German core inflation,
which strips out volatile energy and food costs, was likely to
remain weak in the coming months.
"This should encourage the ECB to implement its asset
purchases as planned," McKeown said.
The inflation rate for the entire euro zone is expected to
rise to 2.0 percent in February from 1.8 percent in January,
economists polled by Reuters said. Those figures are due on
The ECB has slashed interest rates and adopted a bond-buying
programme worth 2.3 trillion euros to pump money into the
A sustained rebound in German inflation would give
Bundesbank President and ECB rate setter Jens Weidmann more
grounds to argue for a reduction in the ECB's bond-buying
programme, a scheme that he has often criticised.
The German central bank has warned that homes in large
German cities are 15 to 30 percent overpriced, in a message that
stoked further fears about the side-effects of the ECB's
(Editing by Larry King)