German inflation slowed to its lowest rate in more than 2-1/2 years in September largely thanks to a sharp drop in oil prices, the Federal Statistics Office said today.
Annual HICP in Europe's largest economy was revised down from a preliminary inflation estimate of 1.1 per cent to 1.0 per cent, though economists said this would likely have little impact on the September euro zone flash estimate of 1.8 per cent.
The September HICP inflation figure was the lowest since February 2004, a spokesman for the Office said.
The inflation slowdown is expected to be temporary, with prices jumping at the start of next year when Germany raises value added tax (VAT) by three percentage points to 19 per cent.
The European Central Bank raised its main lending rate to 3.25 per cent earlier this month and ECB President Jean-Claude Trichet told the European Parliament on Tuesday that monetary policy continues to be accommodative.