Above-average price increases for services and sometimes expensive food are keeping inflation in Germany above the two percent mark. In November, consumer prices were 2.3 percent higher than in the same month last year – as in October. The Federal Statistical Office confirmed preliminary figures.
This meant that inflation was above the important mark of two percent for the fourth month in a row – and, according to economists, will remain there for the time being. Higher inflation rates reduce purchasing power: consumers can afford one euro less. For the euro area, the European Central Bank is aiming for a stable price level with 2.0 percent inflation in the medium term.
Services have become more expensive than average for months
The driver of inflation in Europe’s largest economy, Germany, has been significantly rising prices for services for months. This is where staff shortages and wage increases are having an impact. In November, as in October, service prices in this country were 3.5 percent higher than in the same month last year. Domestic package tours (plus 12 percent) and train tickets (plus 11.9 percent) were significantly more expensive than a year earlier.
Core inflation, which economists pay particular attention to, excluding the volatile prices for food and energy, fell from 2.8 percent to 2.7 percent in November. But it remains elevated. This shows that inflation in other important goods areas remains above average. Overall, consumer prices in Germany fell by 0.2 percent from October to November of the current year.