Economic Buzz: Germany Inflation Accelerates To 10.4% In October

31 Oct 2022 , 02:35 PM

Germanys consumer price inflation accelerated faster than expected in October to set a new record, as the biggest euro area economy heads into a recession, adding more pressure on the European Central Bank policymakers who have signaled more interest rate hikes ahead. The consumer price index rose 10.4 percent following a 10.0 percent increase in September, preliminary data from the statistical office Destatis showed Friday. The CPI climbed 0.9 percent monthly in October, which was much slower than Septembers 1.9 percent. The harmonized index of consumer prices, or HICP, jumped 11.6 percent year-on-year after a 10.9 percent rise in September. On a month-on-month basis, the HICP rose 1.1 percent in October after a 2.2 percent increase in the previous month. Destatis data showed that energy inflation eased slightly, yet remained very high, down to 43.0 percent from 43.9 percent. Energy prices have increased considerably since the war started in Ukraine and have had a substantial impact on the inflation rate, the agency said. Food inflation climbed continued to climb, clocking 20.3 percent in October versus 18.7 percent in the previous month. The reduction of VAT on natural gas supply and district heating from 19 percent to 7 percent probably had a downward effect on the inflation rate in October, the statistical office observed. Services costs rose 4.0 percent year-on-year after a 3.6 percent increase. Rents grew 1.8 percent annually following a 1.7 percent gain in September.Powered by Commodity Insights