• Prior -0.9%; revised to -1.1%

And once again, German retail sales underwhelms on expectations and this time it is being made to look worse than previous times. For one, it comes alongside a negative revision to the January figure. But more importantly, it paints a negative backdrop in the month before we even see the US-Iran conflict impact hit on prices, inflation, and the economy.

Food store sales declined by 1.4% on the month while non-food store retailing saw a 0.7% increase in sales. The latter at least helps to offset slightly the negative drag on the overall report.

This kind of backdrop is not quite what you’d like to see as price pressures have already been keeping more stubborn in Europe’s largest economy. Now when you have to factor in the impact of higher energy prices, that will bite at consumption activity even more.

As such, that will make for a tough outlook for the German economy in the months ahead. That especially as the manufacturing sector recovery is also at risk of being derailed amid a surge in input cost inflation, which will then weigh on demand.

Stagflation risks might well creep back into the picture and that will be another key risk factor that the ECB has to be careful of.

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