Germany February preliminary CPI +1.3% vs +1.2% y/y expected

Latest data released by Destatis - 1 March 2021

• Prior +1.0%
• CPI +0.7% vs +0.5% m/m expected
• Prior +0.8%

• HICP +1.6% vs +1.6% y/y expected
• Prior +1.6%
• HICP +0.6% vs +0.5% m/m expected
• Prior +1.4%

This fits with expectations from the state readings earlier, as German inflation ticks a little higher in February. Base effects and higher input cost inflation are also part of the story here, so that sort of distorts the true nature of the rise.

Expect a more choppy (and potentially higher) trend in 1H 2021 but policymakers at the ECB should continue to brush that aside as they have done so far this year.