Consumer prices in Germany rose in July at an unchanged pace. As in June, goods and services are an average of 2.0 percent more expensive than a year ago, as the Federal Statistical Office reports.
Based on preliminary data, it can be seen that services in particular with an increase of 3.1 percent and foods with an increase of 2.2 percent drive price development. The energy prices, on the other hand, have damped the inflation again, although not as strong as in the previous months. Energy was 3.4 percent cheaper than in July 2024.
The so -called core inflation – i.e. the rate without the prices for food and energy that is prone to fluctuation – is still higher: As in June, it is 2.7 percent. Commerzbank
For months above average inflation for services
The increased inflation of services has been persistent for months. The 3.1 percent in this area is only 0.2 less than in June. One reason is increased wages.
## ECB observed without interest step
The European Central Bank temporarily withdrawn into the observer role a week ago at its most recent interest session. After seven interest rate cuts in a row, the monetary authorities apparently saw inflation so far contained that no further interest step seemed necessary for the time being. The key interest rate therefore remained unchanged at 2.0 percent. For autumn, controversy between supporters and opponents of an even relaxed monetary policy are expected.
With an inflation rate of 2.0 percent, the ECB sees its goal of price stability. Lower price increases could inhibit economic growth because private individuals and companies could delay their investments even lower prices.
Expectations for the year as a whole
Compared to June, prices rose by 0.3 percent, reports the authority.
The Bundesbank assumes that the inflation rate in Germany will fluctuate for the two percent mark in the coming months. The Council of Experts (“Economic”) expects that a value will come out by two percent in 2025.
In 2022, inflation in Germany was 6.9 percent sneaked, in 2023 it was 5.9 percent. After the Russian attack on Ukraine in February 2022, the prices for energy and food had climbed suddenly. In the past year, the inflation dropped to 2.2 percent. The higher the inflation rate, the lower the purchasing power of the people.