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Inflation in Germany rose to 2.4% in October, back above the European Central Bank's target of 2%, even though the country narrowly avoided a technical recession in the third quarter.
The preliminary pressure announced by the German statistics office Destatis is harmonized across the euro area for reasons of comparability.
Analysts polled by Reuters had expected harmonized inflation of 2.1% in October.
Harmonized inflation fell to 1.8% in September after hitting the European Central Bank's 2% target in August.
So-called core inflation, which excludes more volatile food and energy costs, was 2.9% in October, the German statistics office said on Wednesday, up from 2.7% in September.
Inflation in the services sector also rose to 4% in October from 3.8% in the previous month.
In a note translated by CNBC, Deutsche Bank economist Sebastian Becker said that the renewed rise in core inflation shows that the problem of increasing price increases has not been solved and that further patience is needed.
“In the short term, signs point to higher inflation,” he said, noting that the impact of base effects alone was responsible. However, the current slowdown in the labor market suggests that the core number will slowly decline over the next year.
Germany's Federal Employment Agency reported on Wednesday a seasonally adjusted increase in the number of unemployed people in October that was stronger than expected, Reuters reported.
Meanwhile, Carsten Brzeski, global head of macro at ING, said inflation was expected to rise further in the last two months of 2024 and then remain between 2% and 3% next year.
“Inflation is likely to remain somewhat too high as favorable energy base effects continue to fade while wages rise,” he said.
The inflation data comes after Destatis published on Wednesday a preliminary reading of Germany's gross domestic product, which grew 0.2% in the third quarter compared to the previous three months.
The increase surprised analysts polled by Reuters, who had expected a 0.1% decline, which would allow Germany to narrowly avoid a technical recession – characterized by two consecutive quarters of decline.
Destatis also revised second-quarter GDP figures to a 0.3% decline, after previously reporting a 0.1% decline.
Consumer price data for the entire euro zone will be released on Thursday.
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