April 29, 2020 / 9:00 AM / a month ago

German inflation to slow further in April, regional data suggests

BERLIN (Reuters) - Inflation slowed further in several German states in April, data showed on Wednesday, suggesting the national reading will stay well below the European Central Bank’s target and pose no threat to stimulus plans to soften the impact of the coronavirus pandemic.

In North Rhine-Westphalia, Germany’s most populous state, consumer price inflation eased to 0.8% year-on-year from 1.4% in the previous month. It slowed to 0.9% from 1.2% in Bavaria and to 0.8% from 1.2% in Hesse, home to financial hub Frankfurt.

Annual inflation also eased in three other states.

The regional inflation figures, which are not harmonised to compare with other European Union countries, feed into nationwide preliminary inflation data due at 1200 GMT.

A poll conducted before the release of the regional data suggested annual pan-German consumer price inflation, harmonised to compare with data from other EU member states, would slow to 0.5% in April from 1.3% in the previous month.

This would be the lowest reading since August 2016.

The ECB, which targets an inflation rate of just under 2%, has pushed its interest rates to record lows and resumed a massive euro bond-buying programme in response to the coronavirus pandemic and the economic lockdowns it has prompted.

It has also ditched a cap on how many bonds it can buy from any single euro zone country, clearing the way for potentially unlimited money-printing as it scales up its response to the coronavirus outbreak.

Reporting by Michael Nienaber; Editing by Gareth Jones

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