German inflation edges closer to ECB target in January, state data show

BERLIN (Reuters) – Inflation rose closer the European Central Bank’ target in German states in January, data showed Thursday, but the figures are unlikely to divert the ECB from its stimulus policy.

The ECB last week reaffirmed its pledge to keep rates at rock bottom or even cut them, while also buying bonds at 20 billion euros ($22.19 billion) per month, until inflation in the euro zone headed back to its target of just under 2%.

The euro zone’s central bank has fallen of its inflation target for years. The ECB has also launched a broad review of its policy with the possible aim of redefining its main goal how to achieve it.

A poll conducted before the release of the regional data suggested German consumer price inflation, harmonized to compare with data from other European Union countries, would rise by 1.7% after an increase of 1.5% in December.

Nationwide preliminary inflation data are due at 1300 GMT.

In North Rhine-Westphalia, Germany’s most populous state, inflation registered 1.8% after 1.7% in December. In Bavaria, consumer prices rose by 1.5% after a 1.3% increase a month earlier.

The state inflation readings, which are not harmonized to compare with other countries, feed into nationwide figures.

Economists expect euro zone consumer prices — due on Jan. 31 — to rise by 1.4% after 1.3% in December.

(Reporting by Joseph Nasr; Editing by Paul Carrel)