North Rhine-Westphalia CPI

October: -0.3% m/m, +2.3% y/y
September: +0.3% m/m, +2.8% y/y
—
Pan-German CPI

MNI median forecast: +0.1% m/m, +2.6% y/y
MNI forecast range: -0.1% to +0.1% m/m

September: +0.1% m/m, +2.6% y/y

FRANKFURT (MNI) – Consumer prices in the German state or North
Rhine-Westphalia dropped in October as cheaper services, motor fuel and
a drastic fall in education prices offset costlier food, clothes and
household energy, the state’s statistical office reported on Wednesday.

After rising 0.3% in September, prices fell by the same percentage
in October, cutting the annual rate to +2.3%.

The decline in prices for this month suggests that pan-German
figures may surprise to the downside. Analysts had expected prices to
rise 0.1% m/m for Germany as a whole and had forecast annual inflation
at +2.6%.

Excluding heating oil (+1.3% m/m, +24.4% y/y) and motor fuel prices
(-1.7%/+12.7%), core CPI was also at -0.3% m/m, for an +1.6% rise on the
year.

Food and alcohol-free beverages were 0.1% higher on the month,
despite the 0.4% monthly drop in seasonal foodstuffs, for a 3.2% rise on
the year.

Clothing and shoe price inflation slowed drastically in October,
rising only 1.6% on the month compared to September’s 6.2% jump, though
annual inflation accelerated to +5.1% vs. +4.4% previously.

Packaged holiday tours were down 1.1% on the month; hotel and
restaurant services were unchanged.

While less than 1% of the overall index, education prices fell a
whopping 50.1% on the month in October, leading the way in declines.
Other significant monthly declines were noted service prices, which fell
1.6%.

Firms polled in the latest PMI survey reported moderating price
pressures this month, as input price inflation fell to near two-year
lows and “only marginal” output price inflation.

A recent Ifo survey also pointed to easing pipeline pressures, with
the proportion of manufacturers looking to raise prices at its lowest
point since March 2010.

— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —

[TOPICS: M$G$$$,M$X$$$,MAGDS$,M$XDS$,MT$$$$,MTABLE]