German Inflation Accelerates in August

Inflation in Germany picked up sharply in August, beating forecasts, led by rising prices for energy and food.

Germany's annual inflation rate, measured by harmonized European Union standards, rose to 1.8% from 1.5% in July, the Federal Statistical Office said Wednesday. Economists polled by The Wall Street Journal had forecast an increase to 1.7%.

The rise will bolster expectations that eurozone inflation has picked up too, albeit not as markedly as in the region's largest economy.

Economists polled by The Wall Street Journal forecast an increase in the eurozone's inflation rate to 1.4% in August from 1.3% in July, as Eurostat is due to publish a fresh set of data Thursday.

The European Central Bank--struggling to meet its inflation target of "below, but close to" 2%--is likely to welcome the latest rise in German inflation.

But many economists caution that the ECB's job is getting harder, as the euro's appreciation over the last few months is weighing on its inflation outlook. Generally speaking, a stronger euro pulls down import prices.

The rise in Germany's annual inflation rate was led by energy and food, as inflation in both categories accelerated in August. Compared with August 2016, energy prices increased 2.3%, while food prices rose 3%, according to the Federal Statistical Office.

Write to Nina Adam at nina.adam@wsj.com

(END) Dow Jones Newswires

August 30, 2017 08:50 ET (12:50 GMT)