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German state CPI accelerates ahead of national inflation print

Inflation rose in all four major states, with Saxony and North Rhine Westphalia both at 3.3% year over year in September.

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German state CPI readings released ahead of Germany's national inflation report showed a broad acceleration across multiple regions, pointing to hotter nationwide price pressures, Forexlive reports.

Bavaria's September CPI climbed to 3.2% year over year from 2.9% in August, while Saxony and North Rhine Westphalia both rose to 3.3% from 2.9%. Baden Wuerttemberg also moved higher, contributing to the view that the increase was not confined to just one or two states.

Forexlive notes that the state data are not a perfect proxy for the national figure, but they have historically been useful for gauging the direction of Germany's headline CPI. With the state readings suggesting upside risk, a national headline CPI print around 3.2% and a return above the 3% level appeared plausible ahead of the release.

The renewed inflation pickup is expected to keep attention on the ECB's outlook for rates, Forexlive adds, as the focus shifts to whether inflation is continuing to reaccelerate.

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