By Michael Nienaber
BERLIN (Reuters) - German annual inflation accelerated more than expected in May as rising energy costs pushed up consumer prices at the fastest rate in eight months, easing concerns about deflation in the euro zone.
Preliminary data for Europe's biggest economy showed on Monday that consumer prices rose 0.7 percent from the same month last year, when harmonised to compare with other European countries.
Inflation remained above zero for a third month running and hit its highest level since last September. However, the rate remained far below the European Central Bank's inflation target for the broader euro zone of just below 2 percent.
The Reuters consensus forecast had been for harmonised prices to rise by 0.6 percent on the year after an increase of 0.3 percent in April.
"With these figures the spectre of deflation is fading into the background," said Berenberg Senior Economist Christian Schulz, adding that he now expected consumer prices for the whole of the euro zone to increase by "at least" 0.2 percent.
Preliminary euro zone data is due out on Tuesday. Analysts polled by Reuters expect annual consumer prices in the single currency bloc to have risen by 0.2 in May after a flat reading in April.
Schulz noted that rising inflation rates also in other euro zone countries such as Spain and Italy should help to stabilise inflation expectations, which would be welcome news for the ECB.
"Specific to Germany may be the impact of the new national minimum wage on the price of some services, which may gradually push up inflation as well," he added.
While the federal statistics office does not publish a detailed breakdown of its inflation figure, data released earlier on Monday from German states showed food and fuel prices rebounded on the month.
Germany's Federal Statistics Office said it would publish its final consumer price data for May on June 16.