German inflation rises to hotter-than-expected 2.1% in August

German inflation rose by a higher-than-expected 2.1% in August, preliminary data from statistics office Destatis showed Friday.

Economists polled by Reuters had expected the headline figure, which is harmonized for comparability across the euro zone, to come in at 2%. Inflation had risen by a cooler-than-expected 1.8% in July.

Markets and economists are closely watching inflation figures around the world to assess the impact of U.S. President Donald Trump's tariff policies. Various sectoral levies, as well as so-called reciprocal duties, have been in effect in recent months.

The U.S. and EU struck a trade agreement in July, including a 15% tariff rate on many EU goods exported to the U.S. Fresh details released earlier this month suggested that this blanket rate will also be applied to some hotly contested sectors like pharmaceuticals — but crucial questions still remain unanswered, leaving businesses on edge.

The tariffs are widely expected to drive prices higher in the U.S., but their impact on costs elsewhere is less clear.

There have also been widespread concerns about tariffs and related economic uncertainty weighing on economic growth. Germany's economy, the largest in the EU, has long been hovering near the flatline. The country's gross domestic product expanded by 0.3% in the first quarter, before contracting by 0.3% in the following period according to the latest data from Destatis.

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