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Most states showed weaker year-on-year readings in August relative to July
Of all the releases above, only Bavaria and North Rhine Westphalia saw the year-on-year readings hold steady from July. The others had a more prominent trend where the figures were weaker and they were weighed down by one particular price area – clothing and shoes.
Education also showed a stark drop in all state readings but the weighting for that is a minor one, though it surely did play a part. Anyway, that shows that there could be a distinct one-off factor that is dragging down inflation this month.
The national headline reading is expected to hold steady at +2.0% y/y but given the skew we are seeing for most states, it is likely the reading will be a tad softer. But as mentioned above, it’s not entirely a sign that inflation is slowing down but this appears to be more of a one-off decline more than anything else.
Saxony
Brandenburg