Inflation accelerated in Germany in October, to reach its highest level in more than six and a half years on an annual basis.
Inflation in Germany (YoY % change)
Harmonized with European standards and measured by consumer prices, annual inflation stood at 2.4% in October against 2.2% in September, announced the Federal Statistical Office on Tuesday, October 30th. It is at its highest since February 2012 and meets consensus expectations. In non-harmonized data, the inflation rate stood at 2.5% in October, the highest in 10 years.
The pressures have generally intensified, suggesting that their rise is also due to changes in core inflation and not only to its more volatile components such as food and energy prices. The flash inflation estimate does not give the figure of core inflation in Germany. However, preliminary data for the October Eurozone inflation as a whole came out at 2.2% (1.1% for core inflation) after 2.1% (1.0% for core inflation) in September, on an annual basis. In this context of rising inflationary pressures, the ECB confirmed last week its intention to end its QE program (2.600 billion euros of bond assets) at the end of the year and to raise its key interest rates for the first time since 2011 at some point after the summer of 2019.
Julien Moussavi, Head of Economic Research - Sources: Beyond Ratings, Datastream