German Inflation Set to Rise in December

Inflation in Germany, the eurozone's biggest economy, looked set to pick up this month as a result of increased tobacco taxes, key regional data showed on Wednesday. In the southern state of Bavaria, the consumer price index (CPI) rose by 1.1 percent in December compared to the previous month and was 2.5 percent higher than it had been in December 2003, the regional statistics office in Munich said in a statement. Inflation over 12 months was therefore faster than the 2.1 percent recorded the previous month. Preliminary pan-German inflation figures are calculated on the basis of consumer price statistics for six so-called indicator states -- Baden-Württemberg, Bavaria, Brandenburg, Hesse, North Rhine-Westphalia and Saxony. Looking at the average annual rate of consumer price increases for the whole of 2004, inflation picked up sharply in both Saxony and Brandenburg this year, the statisticians calculated.