North-Rhine Westphalia CPI

April: +0.3% m/m, +2.5% y/y
March: +0.5% m/m, +2.0% y/y
—
Pan-German CPI

MNI median forecast: +0.1% m/m, +2.2% y/y
MNI forecast range: -0.1% to +0.4% m/m

March: +0.5% m/m, +2.1% y/y
—

BERLIN (MNI) – Consumer prices in the western German state of
North-Rhine Westphalia rose 0.3% in April, lifting the annual inflation
rate to +2.5% from +2.0% in March, the state statistics office said
Wednesday.

The monthly result was above the +0.1% median forecast for
pan-German CPI in an MNI survey of analysts. Earlier today, Saxony
posted a monthly CPI rate of +0.4%, Hesse of +0.3% and Brandenburg of
+0.2%.

As in the other states, upward pressure on monthly inflation in NRW
came from energy prices, with motor fuel up 3.1%, heating oil up 1.2%
and gas up 0.5%, while electricity remained unchanged.

Due to the Easter holiday period, packaged holiday tours were 0.2%
more expensive on the month. Airline tickets rose 2.3%, while hotel and
restaurant services bucked the trend and fell 0.3%.

Prices for clothing and shoes rose 0.3% on the month.

Food prices fell 0.3% on the month, with seasonal food prices
declining by 0.9%. Alcoholic drinks and tobacco products fell by 0.1%.

Annual inflation was again marked by the surge in energy and food
prices. Heating oil prices rose 26.4%, motor fuel 10.4%, electricity
7.5% and gas prices 4.6%. Food prices climbed 1.4%, with seasonal food
down 2.4%.

Packaged holiday tours rose 10.5% on the year, airline tickets
13.8% and hotel and restaurant services 1.7%. Clothing and shoes were up
1.2% while alcoholic drinks and tobacco products fell 0.4%.

CPI excluding heating oil and motor fuel rose 0.1% on the month and
1.9% on the year.

Analysts caution that businesses will increasingly pass on their
high input costs, driven by the spike in energy prices. Selling price
expectations have risen across the board, they point out.

Some analysts already warn of a broad upward trend in inflation
which would increasingly weigh on consumer sentiment. Annual inflation
rates above 2% could become the norm, they fear.

Bundesbank President Axel Weber said earlier this month that
inflation in the Eurozone could average as much as 2.5% this year and
price pressures in Germany may be even more intense.

In Germany, inflation “should also be significantly above 2%,”
Weber said. “I even expect towards the end of the year and in the second
half due to base effects…rates of increase that could be just under
3%.”

European Central Bank president Jean-Claude Trichet said in a
newspaper interview on Tuesday that it is “extremely important to
prevent second-round effects after the ‘hump’ in the headline inflation
rate.” It is “not acceptable,” he said, to allow any perception that
energy and food inflation might become persistent influences on overall
inflation.

“We have risks of second-round effects here and there,” Trichet
observed. “We have to be very alert that they do not materialise.” In
fact, he said, “at the moment I do not see any significant materialising
of second-round effects and I do not see un-anchoring of inflation
expectations. But this is no time for complacency.”

For detailed information see data table on MNI MainWire.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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