Germany’s inflation slowing in February is positive for ECB

The revised statistics for Germany’s inflation in February show decelerating price growth, rather than a reported previously steady inflation rate. According to the revised data of the statistical office, consumer prices increased by 2.6% in annual terms, which is lower than the previously reported estimation of 2.8%. These changes raised the European Central Bank’s (ECB) expectations for easing price pressure.

Given Germany's significance for the eurozone economy, the revised data could affect the overall inflation rate for the 20 countries of the region. The final data on the overall rate is due on March 19. Earlier, Eurostat reported a decline of the eurozone inflation to 2.4% at the beginning of the month, while January saw a 2.5% growth.

After last week’s decision to cut rates for the sixth time since last June, the ECB is facing growing internal disagreement over the next steps in monetary policy. The regulator is reviewing all available data, taking into account conflicting signals from business activity and consumer demand, to determine the future policy trajectory.