German inflation eases slightly in August

By Maria Martinez

BERLIN (Reuters) -German inflation fell slightly in August but was still higher than forecast, data showed on Wednesday, as the downward trend seen since the start of the year slowed.

Consumer prices, harmonised to compare with other European Union countries, increased by 6.4% on the year in August, according to preliminary data from the federal statistics office. Analysts polled by Reuters had forecast harmonised annual inflation of 6.3% after a reading of 6.5% in July.

Non-harmonised inflation in Germany fell to 6.1% in August from 6.2% the previous month.

The data from Germany, the euro zone's biggest economy, come as the European Central Bank is still looking for evidence that underlying inflation has turned a corner.

Germany's core inflation rate, which excludes volatile items such as food and energy, was 5.5% in August, unchanged from July.

Food prices continued to show above-average growth, posting a 9.0% year-on-year increase. Energy prices were 8.3% higher on the year, after government relief measures kept prices lower last summer.

The ECB will keep a close eye on euro zone inflation data, which will be published on Thursday. Economists polled by Reuters expect the inflation rate across the 20 countries that use the euro to fall to 5.1% in August from 5.3% in July.

Inflation remains far above the central bank's 2% target and could take until 2025 to fall back to that level, but weak economic data is intensifying the debate over just how much more the ECB needs to do.

(Reporting by Maria Martinez; Editing by Catherine Evans)