• German September final CPI +3.3% vs +3.3% y/y prelim
• Prior +2.9%
• Germany September final HICP +3.3% vs +3.3% y/y prelim
• Prior +2.9%

The headline readings are unrevised compared to the preliminary estimates, but they do reaffirm that German headline inflation has climbed back above the 3% threshold at the end of the third quarter.

Energy inflation is the main culprit, rising 3.8% within the month and is 14.9% more expensive compared to the same month last year. This marked the third consecutive month of year-on-year increases in energy prices (August 2026: +10.5%; July 2026: +8.3%; June 2026: +3.4%) and the highest since February 2023.

Core annual inflation is seen at 2.4%, keeping steady relative to August at least. So, that at least provides some comfort that the surge in energy prices isn’t broadening all too much – yet. Services inflation continues to be a key sticking point, seen at 2.7% in September, even if it has cooled from above 3% earlier in the year. But even at this rate, it is still underpinning core inflation in keeping that above the 2% threshold.

For now, the ECB can take comfort in that core prices aren’t surging again in Europe’s largest economy. But as higher energy prices continue to feed through, the risk of spillover effects will continue to rise. And that means the risks of second-round effects to the inflation outlook will also gather pace, the longer that this trend keeps up.

This article was written by Justin Low at investinglive.com.