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German inflation at lowest in four years

Berlin - German inflation stood at a four-and-a-half-year low in September due mainly to lower energy costs, the Federal Statistics Office said on Wednesday.

Consumer prices in Germany grew by only 0.8% in September, compared to the same month in 2013. That was the lowest inflation rate since February 2010. The rate was unchanged from August.

The stifled growth in inflation means consumers in Europe's largest economy will continue to enjoy stable prices, but it underlines concerns about deflation and mediocre economic growth taking hold in the 18-member eurozone and worldwide.

The downward pressure on inflation was caused mainly by sinking energy prices, the office said. Those were 2.2% lower overall than a year earlier. The drop would have been more severe had it not been for a 1.8% rise in the cost of electricity, a subset of the overall energy figure.

The dampened inflation rate is expected to continue because of falling prices for motor fuels and heating oil, which dropped year-on-year by 4.1% and 7.9%, respectively.

Excluding the price of petroleum products, the inflation rate stood at 1.2% - still far from the European Central Bank's (ECB) annual target of just under 2%. Germany hit that target in July 2013 with a rate of 1.9%, but inflation has since then moved steadily further away from the ECB mark.

Food prices rose 0.9% compared to one year earlier. Consumers paid less for edible fats and oils, which fell by 7.3%, as well as for fruits and vegetables, which fell by 1.9% and 1.5% respectively.

Prices in the services sector rose 1.5%, due mainly due to an 1.4% increase in rent, on which Germans spend roughly a fifth of their incomes.

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