Hesse CPI

October: flat m/m, +2.0% y/y
September: flat m/m, +2.0% y/y

—

FRANKFURT (MNI) – Consumer prices in the German state of Hesse were
unchanged for the second consecutive month in October, as cheaper energy
and leisure offset costlier foodstuffs and apparel, leaving the annual
rate stable at +2.0%, the state’s statistical office reported on Friday.

With Brent crude down 0.2% on average from September, motor fuel
prices plummeted 4.5% m/m. The 2.9% rise in heating oil prices helped to
lift household energy prices 0.6% m/m, but overall energy prices were
still down 1.3% m/m, lowering the annual rate to +4.9%.

Excluding energy, core CPI managed a modest 0.2% rise on the month,
lifting the annual rate to +1.7% y/y.

Earlier today, the Federal Statistical Office reported that German
energy imports fell 3.3% on the month, with crude oil prices down 4.2%
and natural gas 4.4% cheaper.

The International Energy Agency sees oil market fundamentals easing
over the medium term, theoretically permitting a $20 decline in barrel
prices by 2017.

However, “oil prices are expected to remain volatile over the
forecast period amid heightened supply and demand uncertainty,” the
agency cautioned earlier this month.

Leisure prices were down by an additional 0.4% on the month,
cutting the yearly rate to +1.6%, while restaurants and hotel services
were 0.7% cheaper m/m, but 1.8% higher on the year.

Conversely, the 3.2% jump in seasonal food prices lifted overall
foodstuff 0.9% on the month and brought the annual change to +4.9%.

Clothing and shoe monthly price inflation slowed to +2.3%, but
accelerated on the year to +1.8%.

Pipeline price pressures look to be building in the private sector,
a recent PMI report showed, with input costs seeing a solid rise, while
output prices increased for the first time in four months. Pricing power
remains subdued, however, as strong competition and weak economic
conditions weighed, the PMI poll added.

Speaking to members of the German Parliament earlier this week,
European Central Bank President Mario Draghi sought to assuage fears
that the central bank’s newly announced bond-buying program would lead
to higher inflation.

“In our assessment, the greater risk to price stability is
currently falling prices in some euro area countries,” Draghi said. “In
this sense, OMTs are not in contradiction to our mandate: in fact, they
are essential for ensuring we can continue to achieve it.”

For detailed information see data table on MNI MainWire.

— Frankfurt bureau: +49 69 720 142; email: twailoo@mni-news.com —

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