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Inflation quickens slightly in three German states

Published 04/28/2009, 04:36 AM
Updated 04/28/2009, 04:48 AM

BERLIN, April 28 (Reuters) - Annual inflation in three German states quickened slightly in April, preliminary data released on Tuesday showed, pointing to firmer price pressures across Germany and the broader euro zone this month.

Data from six German states are used to calculate a preliminary inflation figure for Germany, which offers an early insight into price pressures in the 16-nation euro zone.

A Reuters poll of economists pointed to pan-German annual consumer price inflation (CPI), expected to be released later on Tuesday, registering 0.7 percent -- up from 0.5 in March. The consensus forecast was for no change on the month.

In the state of Hesse, annual CPI edged up a shade to 0.3 percent in April from 0.2 percent in March. In Saxony, it accelerated to 0.7 percent from 0.4 and in Brandenburg it picked up to 0.5 percent from 0.2.

Weaker household energy costs helped keep a lid on month-on-month price changes, which rose by just 0.1 percent in Brandenburg and Saxony and fell by 0.1 percent in Hesse.

Bundesbank President Axel Weber said in a newspaper interview published on Monday that he expected German inflation to turn negative this year before price pressures firm markedly.

Weber, a member of the ECB's Governing Council, said inflation had eased largely due to a fall in energy prices. He confirmed his preference for interest rate cuts to stop at 1 percent in the interview with Frankfurter Allgemeine Zeitung.

However, Governing Council member Nout Wellink was quoted as saying the ECB should discuss cutting rates below 1 percent.

The Reuters poll also pointed to no month-on-month change in an EU-harmonised price index (HICP), and an annual reading of 0.7 percent . (Editing by Mike Peacock)

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