Germany's consumer price inflation accelerated further in January to its highest level in four years, confirming the flash data published earlier, final figures from Destatis showed Tuesday.
As per the data, food inflation basket witnessed contraction for the second month in a row with inflation at (-) 0.56 per cent in January as against (-) 0.70 per cent in December.
Almost half of January's monthly increase in the consumer price index was driven by rising fuel prices, with the gasoline index up nearly eight percent while costs for housing, clothing and new cars also rose, according to the Labor Department.
The Producer Price Index, which measures prices from the seller's perspective, rose 0.6 per cent in seasonally adjusted figures, which was the largest such gain since September 2012 and well above an analyst consensus forecast of 0.3 per cent.
Pulse inflation moderated to 6.21 percent, from 18.12 percent in December.
Higher oil prices across the globe led the rise, causing the price of fuel to increase.
The Producer Price Index showed that input prices - the amount paid for materials and fuel by United Kingdom manufacturers - saw its highest rate of growth since4 September 2008, rising 20.5% in January.
Ballooning import prices triggered by the Brexit-hit pound were expected to bump up prices as companies pass on their soaring costs to consumers. Health care costs rose 0.2 percent. Legal services have increased 6.6 percent in price over the previous year, while the price of financial services rose 4.4 percent.
"But the honeymoon of rock-bottom price rises is now over with inflation having doubled since October, and set to increase further in the coming months".
It means a basket of goods and services priced at £100 a year ago would now cost £101.90. "Despite the tumbling pound acting as a shock absorber for the economy in the wake of the Brexit vote, and strong industrial output and export figures, the MPC may hold fast until after Article 50 is triggered and business intentions are known".
"Both house prices and rents continue to grow over the year but with some signs of a slowdown in recent months".
"Inflation is not the main driver of monetary policy at the moment.I do think they are going to tighten more this year, but the main driver is credit risk and concerns of leverage and what's going on in the property market", said Capital Economics' Evans-Pritchard. "Until the first half of FY18, I'm expecting all-in-all inflation to be at least a percent and more below RBI's trajectory". But it was below a forecast for 1.9% in a Reuters poll of economists, as falling clothes prices offset some of the upward pressure on inflation from fuel and food.