Germany's inflation rate rose slightly, further strengthening the ECB's reasons for raising interest rates next month. Consumer prices rose 2.9% year on year in August, higher than the 2.8% increase in the previous month, reaching the highest level since April, but lower than analysts' median estimate of 3.1%. As the Middle East peace agreement is still far away, energy prices are once again a major driver of inflation, while service and food prices have declined somewhat. Earlier, data from France and Spain also showed that rising oil and gas prices were driving up inflation throughout the region, which increased the pressure on the ECB to take action. ECB officials have raised interest rates once before and are expected to raise interest rates again on September 10. Traders are betting that monetary policy will be further tightened next year.

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