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German Inflation Climbs Again As Energy Prices Soar

German inflation gathered pace again in August, official data published Tuesday showed, as the soaring price of energy heaped pressure on households.

Consumer prices rose by 7.9 percent in the year to August, according to the federal statistics agency Destatis, having fallen to 7.5 percent in July.

Energy prices, which have taken off since the Russian invasion of Ukraine, had a “substantial impact on the high inflation rate”, Destatis said in a statement.

The prices paid for household electricity and fuel rose by 35.6 percent in the year to August, according to the agency.

Sky-high inflation figures — well above the two percent rate targeted by the European Central Bank — have strengthened calls for a response from central bank policymakers and the government in Berlin.

German ministers were set to discuss the alarming increase in the price of energy at a two-day cabinet retreat which started earlier on Tuesday.

With energy bills on the rise, the government is under pressure to do more to ease the strain on struggling households.

Initial relief measures announced by Berlin earlier this year will fall away at the end of August, including a popular nine-euro (nine-dollar) ticket valid for a month’s worth of travel on local and regional trains.

The end of the relief measures and the high August inflation figures augured the start of what could be a “hot inflation autumn”, LBBW bank analyst Elmar Voelker said.

The new data also argued for a “strong further hike” in eurozone interest rates, Voelker said.

The ECB is expected to do just that at its meeting next week, having raised interest rates for the first time in over a decade in July.

On the harmonised index used as a reference by the central bank, inflation in Germany sat at 8.8 percent in August.

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AFP

Agence France-Presse (AFP) is a French state-owned international news agency based in Paris. It is the world's oldest news agency, having been founded in 1835 as Havas.




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