German inflation rose slightly in November, climbing back above the European Central Bank鈥檚 two-per cent target, according to preliminary data released Thursday.
The annual inflation rate in Europe鈥檚 biggest聽economy聽increased to 2.2 per cent, up from two per cent in October, figures from federal statistics agency Destatis showed.
The rebound in inflation was widely anticipated but lower than the 2.3-per cent rate predicted by analysts surveyed by financial data firm FactSet.
ECB policymakers had also predicted eurozone inflation, of which the German figures are a major component, would rise again going into 2025.
But the central bank for the 20 countries that use the euro has said it still expects the rate to edge back towards two per cent over the following months.
The bump in the inflation outlook has not deterred the central bank from lowering interest rates in recent months.聽
From a high of four per cent, reached in the wake of soaring inflation caused by the coronavirus pandemic and Russia鈥檚 invasion of Ukraine, the ECB has lowered its key deposit rate to 3.25 per cent.
The Frankfurt-based institution is expected to lower rates again at its next meeting in December amid signs of weakness in the eurozone聽economy.
The increase in the German inflation rate was 鈥榤ainly the result of less favourable energy base effects鈥�, ING bank analyst Carsten Brzeski said.
The rate could remain at a level that was 鈥榮lightly too high鈥� for a while longer as wages continued to increase, Brzeski said.聽
The November figures could discourage some ECB decision makers from seeking to implement a 50-basis-point rate cut in December and lean instead towards a smaller quarter-point cut, he said.
鈥楨ven more important... is the question of how far the ECB will eventually go with rate cuts鈥� beyond December, Brzeski said.
Inflation in Spain also accelerated in November, hitting 2.4 per cent due to higher fuel and electricity prices after reaching 1.8 per cent in October, official data showed Thursday.