From BZ/Reuters
Inflation in Germany accelerated surprisingly sharply in October. Consumer prices rose by an average of 10.4 percent compared to the same month last year, as the Federal Statistical Office announced on Friday.
Economists polled by the Reuters news agency had only expected inflation to reach 10.1 percent after hitting the highest level since 1951 at 10.0 percent in September.
Energy rose particularly sharply as a result of the Russian war against Ukraine: it cost an average of 43.0 percent more than in October 2021. The reduction in VAT for natural gas deliveries and district heating from 19 to 7 percent is likely to have had a price-dampening effect. Food cost 20.3 percent more.
Consumers must be prepared for further price increases in the coming months. In October, too, every second company planned to ask customers to pay more in the near future, as the Munich Ifo Institute found out in its monthly survey. The corresponding barometer for price expectations for the coming months fell only slightly for the economy as a whole to 51.5 points, after 53.8 in September.
“The wave of inflation has not yet broken,” said Ifo economic chief Timo Wollmershäuser. “In particular, the high energy costs have not yet been passed on to consumers completely.” Food retailers are still planning price increases almost across the board. According to the Bundesbank, the inflation rate in Germany should remain in the double digits in the coming months.
Despite the sharp rise in the cost of living, the German economy grew by 0.3 percent in the third quarter. However, most experts are predicting a winter recession – also because the high prices are eroding the purchasing power of consumers and corona savings are likely to be increasingly depleted.
In September, the annual inflation rate was still 10.0 percent.