German inflation accelerates in August on higher energy prices

New lead, adds details from paragraph 4

By Maria Martinez

BERLIN, Aug 31 (Reuters) - German inflation rose in August on higher energy prices due to the Iran conflict, but the increase was less than expected and core inflation stabilised.

Inflation rose to 2.9% year on year from 2.8% the month before, preliminary data from the federal statistics office showed on Monday.

Analysts polled by Reuters had forecast the EU-harmonised consumer price index to come in at 3.1% in August.

Energy inflation drove the increase, rising to 10.5% in August from 8.3% in the previous month.

The war in Iran had pushed up energy and raw material prices in previous months and the German government now expects inflation to accelerate to 2.7% this year and 2.8% in 2027.

Core inflation, which excludes volatile food and energy prices, remained unchanged from the previous month at 2.4%.

The German data comes ahead of the euro zone inflation release on Tuesday. Inflation in the bloc is expected to come in at 3.3% in August, up from 2.9% in the previous month, according to economists polled by Reuters.

European Central Bank policymakers are ready to raise interest rates at their next meeting in September to contain the side-effects of the Iran war but they have little appetite to signal further tightening after that, sources told Reuters.

(Reporting by Miranda Murray, Editing by Friederike Heine and Ludwig Burger)

((Miranda.Murray@thomsonreuters.com;))