Inflation picked up in Germany this month, though less than expected, with few signs of broader price pressures in the economy despite conflict in the Middle East keeping upward pressure on energy costs.

German consumer prices were 2.9% higher than a year earlier, compared with an annual inflation rate of 2.8% in July, according to European Union-harmonized data from the country's statistics agency Destatis on Monday. This was lower than a consensus of economists polled by The Wall Street Journal, which expected a reading of 3.2%.

The increase comes as war in the Middle East continues to keep energy costs elevated. Oil and gas prices fell after a tentative ceasefire between the U.S. and Iran in June, easing concerns over disruption to energy flows through the Strait of Hormuz. But an escalation of hostilities has seen prices rebound in recent months.

The data follows inflation readings in France and Spain--the eurozone's second- and fourth-largest economies, respectively--where inflation jumped sharply in August.

"Inflation in Germany continues to be driven by energy prices and, consequently, by geopolitical developments," said Dirk Schumacher, chief economist at KfW Banking Group, noting that price increases were driven largely by a jump in petrol costs.

In Germany, the eurozone's largest economy, several months of dry weather and extreme heat have placed additional pressure on prices over the summer. Low water levels in the River Rhine--a key transport artery for the country--have meant ships must carry fewer goods, increasing costs and leading to delivery delays.

"The only limited availability of transport routes on major rivers and sharply rising transport costs are expected to place significant constraints on industrial output and export growth," the Bundesbank said in its August monthly report.

Inflation figures for the eurozone as a whole, scheduled for publication Tuesday, are expected to show consumer price growth of 3.3% on year, a sharp acceleration from 2.9% in July. However, core inflation is expected to remain stable at 2.5%, suggesting limited knock-on effects of higher energy prices in other parts of the economy.

In Germany, the annual rate of inflation in the services sector slowed to 2.8% in August from 2.9% a month prior, emphasizing a lack of second-round inflation effects in the economy. Core inflation remained stable at 2.4%.

This will be reassuring for the European Central Bank, which has been keeping a close eye on second-round price effects to determine whether or not to raise interest rates.

Still, investors expect the central bank to hike rates next week for the second time since the outbreak of conflict in the Middle East, with inflation remaining far above its target of 2%.

"While we expect another interest rate hike in September, given that there's no evidence of significant second-round effects--neither in Germany nor in the rest of the eurozone--we anticipate a prolonged pause in interest rate rises thereafter," Schumacher said.