By Nina Adam

FRANKFURT--Inflation in Germany accelerated sharply in December, hitting its highest level in almost 3.5 years, led by rising prices for fuel and heating oil, the Destatis statistics body said Wednesday, confirming preliminary estimates.

The annual inflation rate, measured according to harmonized European Union standards, rose to 1.7% in December from 0.7% in November. It was the highest annual rate since July 2013.

"Energy prices significantly influenced the inflation rate in December 2016," Destatis said. They rose 2.5% year-over-year amid a 22% jump in prices for heating oil. By comparison, energy prices slumped 6.5% year-over-year in December 2015.

Excluding volatile energy prices, the annual inflation rate was 1.6% in December, measured according to national standards.

In 2016 as a whole, Germany's Harmonised Index of Consumer Prices was up 0.4% from 2015, Destatis said. That is well below the European Central Bank's target of just below 2% over the medium term.

While the recent pickup in inflation should please ECB policy makers, it has started to unsettle some German politicians and economists who argue that the development, coupled with zero interest rates, will soon start eroding households' saving and wage gains.

-Write to Nina Adam at nina.adam@wsj.com

(END) Dow Jones Newswires

January 18, 2017 02:34 ET (07:34 GMT)

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