German Inflation Ticks Up in August Amid Higher Energy Costs

09:28 AM EDT, 08/31/2026 (MT Newswires) -- The annual inflation rate in Germany moved higher in August as the ongoing war in the Middle East further pushed up energy prices, potentially strengthening the case for the European Central Bank to raise its key rates at its September monetary policy meeting. Provisional data published by the country's Federal Statistical Office on Monday showed that German inflation ticked up to 2.9% in August from 2.8% in July, a touch lower than the consensus estimate of 3%. On a monthly basis, consumer prices were 0.2% higher, against the previous 0.8% gain and the expected 0.3% rise. Energy prices jumped 10.5% year over year, following an 8.3% increase in the previous month, while the prices of food were 0.1% higher. On the services front, prices rose 2.8%. The annual core inflation rate, which excludes food and energy, held steady at 2.4%. Meanwhile, the harmonized inflation rate edged up on a yearly basis to 2.9% from 2.8%, against the market forecast of 3.1%. Month over month, harmonized consumer prices were up 0.2%, compared with the previous 0.9% increase and the expected 0.3% uptick. "Looking ahead, the path of headline inflation remains highly affected by the war in the Middle East and oil prices. The recent swings in oil prices have been another reminder that it's almost impossible to come up with oil price assumptions for any inflation forecast that lasts for more than a few days," ING said in a quick take note, adding that expectations are now higher that the ECB would raise its rates at its upcoming meeting. "Even if the ECB doesn't like the term, the second rate hike this year would also fall into the category of 'insurance rate hike', or maybe more to the ECB's liking: a rate hike to strengthen the ECB's credibility and to preempt any possible indirect or even second-round effects from the current energy price shock," the research firm noted. "Whether the ECB will really go beyond a September rate hike is a completely different story."