Inflation up in German states, pointing to national rise

By Maria Martinez

BERLIN (Reuters) - Inflation rose in six economically important German states in December, preliminary data showed on Thursday, suggesting a bumpy road ahead for German inflation.

The inflation rate in North Rhine-Westphalia, Germany's most populous state, rose to 3.5% in December from 3.0% in the previous month.

In Bavaria, the inflation rate rose to 3.4% in December from 2.8% in November, while rising to 4.5% in Brandenburg from 4.1%, to 4.3% in Saxony from 3.9%, to 3.8% in Baden-Wuerttemberg from 3.4%, and to 3.5% in Hesse from 2.9% the previous month.

Due to base effects stemming from last December's energy relief measures for gas and district heating, the disinflationary trend seen in headline inflation in the past months is expected to be temporarily halted at the end of 2023.

Economists polled by Reuters forecast Germany's harmonised inflation at 3.8% in December, up from 2.3% in November.

Economists will pay close attention to national inflation data later on Thursday, as Germany publishes its figures one day before the euro zone inflation data release.

In December, European Central Bank President Christine Lagarde flagged upside inflation risks to push back on imminent rate cuts.

French data showed on Thursday that EU-harmonised yearly inflation stood at 4.1% in December, up from 3.9% in November, due to higher energy and services prices.

Euro zone inflation is expected to rise to 3.0% in December from 2.4% in November, according to economists polled by Reuters.

(Reporting by Maria Martinez; Editing by Miranda Murray)

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