Germany October Inflation Slows to 2.8% as Energy Costs and Core Pressures Ease

Germany's annual inflation rate fell to 2.8% in October, down from 3.3% in September, with monthly consumer prices declining by 0.2% in line with expectations. Destatis reported that the deceleration in Europe's largest economy was driven by lower energy costs, stabilizing core goods, and a temporary fuel tax cut effective through year-end. Core inflation slowed to 2.1% from September's 2.4%. Despite easing price pressures, winter energy concerns persist, leaving markets pricing in about a 79% probability of a 25-basis-point European Central Bank rate hike in December.