Consumer prices provisionally rose 0.6 percent on the month in December. This was a little firmer than expected but, with base effects negative, still soft enough to see the annual inflation rate drop 0.1 percentage points to 1.7 percent. This reversed half of November's gain.
The flash HICP was up a larger 0.8 percent on the month but an even sharper increase in December 2016 made for a 0.2 percentage point decline in its yearly rate to 1.6 percent.
The dip in the annual CPI rate was largely due to energy, where inflation fell from 3.7 percent to 1.3 percent, and, to a lesser extent, food, where the rate eased a couple of ticks to 3.0 percent. Overall goods inflation decreased from 2.1 percent to 1.8 percent while services saw a 0.1 percentage point increase to 1.6 percent.
Today's data suggest little change in underlying German inflation this month which, in turn, increases the likelihood of a broadly stable core rate of the Eurozone as a whole.