Consumer prices moved in line with expectations in February. A provisional 0.6 percent monthly increase fully reversed January's drop and lifted the annual inflation rate by 0.3 percentage points to 2.2 percent. This was the strongest yearly reading since November 2011.
The flash HICP went one better and rose 0.7 percent versus January for also a 2.2 percent annual rate, up from 1.9 percent last time.
However, yet again it was the more volatile food and energy sectors that did most of the work. Hence, annual inflation for the former climbed from 3.2 percent to 4.4 percent while energy jumped from 5.9 percent to 7.2 percent. Elsewhere, the picture was much calmer. In particular, the rate in services edged just a tick firmer to 1.3 percent while rent, excluding utilities, was only flat at 1.6 percent.
Today's German data are in keeping with an expected acceleration in last month's headline Eurozone inflation (flash report due tomorrow) but also warn of no significant pick-up in the core rates. If correct, the best the ECB can hope at this stage is that rising overall consumer prices prompt higher inflation expectations that ultimately feed through back into the underlying measures.