German producer inflation slows

German firms have benefited from lower energy costs

Germany's producer prices have increased by their lowest annual rate in just over two years, as energy prices fell, official data has shown.

Prices paid by German firms for industrial goods rose 3.2% in January, its lowest annual rise since December 2004, after December 2006's 4.4% gain.

January's producer prices in Europe's largest economy were below forecasts.

The slowing inflation was also due to a change to the calculation method, the Federal Statistics Office said.

The data showed that the price of heavy heating oil was 12.3% lower than a year before and 2.6% below December.

Light heating oil dropped 13.5%, or 9.9% on a monthly basis.

The cost of electricity, however, was 3.2% higher for the year.