German inflation slower in Jan

FRANKFURT AM MAIN, Jan 31 (AFP): Inflation in Germany was slower than expected in January, official data showed Tuesday, in a disappointing sign for the European Central Bank from Europe's largest economy.

German inflation stood at 1.6 per cent on an annual basis this month, federal statistics office Destatis said in a statement, while analysts had been projecting a rate of 1.7 per cent, unchanged from December.

Using the ECB's preferred barometer, the Harmonised Index of Consumer Prices (HICP), inflation stood at 1.4 per cent in January, slower than the 1.6 per cent recorded in December.

The ECB's inflation target for the euro area as a whole is an annual rate of close to, but just below 2.0 per cent.

With unemployment low and growth at the highest levels since 2011, inflation in Europe's economic powerhouse might normally be expected to be higher, analysts argue.

In a bid to coax inflation closer to target, the ECB has embarked on a series of unprecedented policy measures, buying almost 2.3 trillion euros of government and corporate bonds, offering cheap loans to banks and setting interest rates at record lows.

But ECB President Mario Draghi has warned recently that inflation could ease back in the coming months due to slowing energy prices.