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Germany’s inflation is likely to turn positive for the first time since July this month, analysts at TD Securities (TDS) noted.

Key quotes

“We look for German inflation to pick up to 0.6% y/y in January (mkt 0.5%), returning to positive territory for the first time since before the VAT cut in July.”

“There is a huge amount of uncertainty around the number though, as it’s always impossible to tell how much of a change in VAT rates ends up getting passed through to consumers.”