German inflation unexpectedly drops in January, with service sector inflation slightly easing

On January 31st, Jinshi data reported that despite still being higher than the target set by the Central Bank of Europe, consumer prices in Germany unexpectedly decreased this month. The year-on-year pump in consumer prices in Germany in January was 2.3%, lower than the 2.6% increase in December, with market expectations at 2.7%. Although higher than the 2% medium-term target set by the Central Bank of Europe, Germany’s lower inflation rate still supported the Central Bank’s decision to cut interest rates on Thursday. Core inflation dropped from 3.3% last month to 2.9%. Service sector inflation, as a labor-intensive component that has been relatively stable in recent months, decreased slightly from 4.1% to 4.0%.