Bloomberg: German inflation climbs to three-month high

Germany's annual inflation rate rose to 2.8% in July, up from 2.4% in June, marking the highest level in three months, Bloomberg reports, citing the country's statistics office.

The report said the figure matched the median forecast and followed a stronger-than-expected increase in Spain's inflation rate to 3.8%.

Inflation data from France, Italy and the euro area are scheduled for release on Friday. Economists expect annual inflation across the 21-member eurozone to edge up to 2.9%.

The latest inflation readings are expected to play a key role in the European Central Bank's next interest rate decision. Policymakers left borrowing costs unchanged last week to allow more time to assess the economic impact of escalating attacks in and around Iran, while signalling that September could be the next opportunity for a rate increase.

European Central Bank Governing Council member Peter Kazimir said at least one additional rate hike may still be necessary even if geopolitical tensions ease, warning against allowing second-round inflationary effects to take hold. Fellow Governing Council member Gediminas Simkus said the likelihood of another rate increase is "much higher" than that of keeping rates unchanged.

National data showed Germany's annual energy inflation accelerated to 8.3%, the fastest pace since April.

Separate official figures released earlier on Thursday also showed that Germany's economy expanded more than expected in the second quarter, while growth data for the first quarter were revised upward.

By Bakhtiyar Abbasov