Consumer prices were unrevised in the final data for August. A 0.3 percent monthly rise matched the provisional estimate, leaving the annual inflation rate at 6.1 percent, down from July's final 6.2 percent and equalling its lowest mark since March 2022.

The final HICP similarly matched its flash reading, meaning a 0.4 percent gain versus July that trimmed 0.1 percentage point off its 12-month rate to 6.4 percent, now 4.4 percentage points above the ECB's target.

The monthly fall in the annual CPI rate reflected a 0.1 percentage point dip to 5.1 percent in services that more than offset a 0.1 percentage point rise to 7.1 percent in overall goods. Energy (8.3 percent after 5.7 percent) again provided a boost but food (9.0 percent after 11.0 percent) subtracted. Consequently, the core rate (ex-food and energy) was flat at 5.5 percent.

Today's update will do nothing to help resolve clear splits on the ECB Governing Council over what to do with key interest rates next week. However, on the doves' side, it also leaves both the German ECDI (minus 25) and the ECDI-P (minus 29) well below zero as they have been for much of the time since mid-June. Economic activity in general is still falling short of market expectations.

No revision is expected to the provisional report leaving a 0.3 percent monthly increase and a 6.1 percent annual inflation rate, down from a final 6.2 percent in July.

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.