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German wholesale prices above forecasts as ECB meets

FRANKFURT: German wholesale prices rose more than expected in February, providing more proof of price pressures that many economists believe could prompt the European Central Bank to raise interest rates on Thursday.

The wholesale price index, one of several indicators of future consumer price inflation, was up 1.1 percent month-on-month and 5.7 percent year-on-year.

The figures marked a sharp acceleration from January when prices were up 0.6 percent month-on-month and 4.0 percent year-on-year. Economists polled by Reuters had expected an increase of 0.6 percent month-on-month and 5.1 percent year-on-year for February.The Federal Statistics Office said the year-on-year rise of 5.7 percent in February was the strongest annual increase seen since September 1989.

Stripping out oil and fuel, the main spurs to recent price pressures in the euro zone, wholesale prices rose 2.4 percent year-on-year, the Office said.

The ECB meets on Thursday amid growing expectations it may raise interest rates to quell inflationary pressures stemming from steep gains in oil prices.

The ECB has already made plain that interest rates are headed upwards. The question now is the timing of its move. In a Reuters poll of economists this week, 19 out of 44 predicted a rise, mostly by 25 basis points.

Some 23 economists predicted the ECB would keep rates unchanged this week. -Reuters