German inflation slowed more than predicted in October, evidence that backs the European Central Bank’s case for keeping stimulus flowing to entrench price stability in the euro area.
Consumer prices rose an annual 1.5 percent, the Federal Statistics Office said on Monday. That’s weaker than September’s 1.8 percent and below the 1.7 percent median forecast in a Bloomberg survey of economists.
Published a day before the euro area’s inflation data, the German figures show how sustained inflation remains elusive even in the currency bloc’s healthiest economy where unemployment is at a record low and domestic spending robust.
The ECB agreed last week to extend its bond-buying program for a third time and pledged to do more if needed — amid opposition from policy makers including Germany’s Jens Weidmann who pushed for a firm commitment to end the program next year.
Figures earlier on Monday showed economic confidence in the region surged to its highest in almost 17 years. Separately, Spain reported that its inflation rate declined to 1.7 percent from 1.8 percent.
Euro-zone inflation probably held steady at 1.5 percent this month, according to a separate survey. Those data will be published at 11 a.m. Luxembourg time on Tuesday.
ECB President Mario Draghi said last week that consumer-price growth in the region will slow temporarily toward the turn of the year before rebounding as previous energy-price changes wash out.
Executive Board member Benoit Coeure said in a newspaper interview over the weekend that he is hopeful that the most-recent extension of bond purchases, which will add another 270 billion euros ($314 billion) to the ECB’s balance sheet through September, will be the last.