Prices were unrevised in February. A final 0.8 percent monthly increase was in line with the provisional estimate and left the annual inflation rate unchanged at January's final 8.7 percent, just short of a multi-decade high.

The final HICP also matched its flash reading meaning that inflation accelerated with a 1.0 percent monthly gain that boosted the yearly rate from December's final 9.2 percent to 9.3 percent. This was still well below October's 11.6 percent all-time peak but also some 7.3 percentage points above the ECB's target.

Within the CPI basket, inflation in overall goods eased from 12.7 percent to 12.4 percent, but in large part reflected a fall in energy (19.1 percent after 23.1 percent). Food (21.8 percent after 20.2 percent) resumed its longstanding upward trend and services (4.7 percent after 4.5 percent) also climbed again. Consequently, core inflation (ex-food and energy), which stood at 5.6 percent in January, edged a tick firmer to 5.7 percent.

Accordingly, despite the stable headline reading, underlying inflation continues to climb. This will not go down at all well at the Bundesbank or the ECB and, being mirrored across most of the Eurozone, will be a key factor in a seemingly assured 50 basis point increase in key ECB interest rates next week. The German ECDI now stands at 11 and the ECDI-P at 10, both measures signalling a limited degree of economic outperformance.

No revisions are expected to the provisional flash estimate leaving a 0.8 percent monthly increase in prices and an 8.7 percent annual inflation rate, the unchanged from January's final post.

The consumer price index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly and annual changes in the CPI provide widely used measures of inflation. A provisional estimate, with limited detail, is released about two weeks before the final data are reported.

The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. In countries such as Germany where monetary policy decisions rest on the central bank's inflation target, the rate of inflation directly affects all interest rates charged to business and the consumer. As a member of the European Monetary Union, Germany's interest rates are set by the European Central Bank.

Germany like other EMU countries has both a national CPI and a harmonized index of consumer prices (HICP). The HICP is calculated to give a comparable inflation measure for the EMU. Components and weights within the national CPI vary from other countries, reflecting national idiosyncrasies. The preliminary release is based on key state numbers which are released prior to the national estimate. The states include North Rhine-Westphalia, Baden-Wuerttemberg, Saxony, Hesse, Bavaria and Brandenburg. The preliminary estimate of the CPI follows in the same day after the last of the state releases. The data are revised about two weeks after preliminary release.

Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.

By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.