Germany: energy boosts inflation in September to 10% over one year, unheard of in 71 years

The price index gained 2.1 points year-on-year compared to August, according to the Destatis institute. Berlin intervenes to the tune of 200 billion euros.

Inflation in Germany jumped in September to 10.0% year on year, the highest value since December 1951, due to soaring energy prices in the wake of war in Ukraine, according to reports. provisional figures released Thursday.

The price index gained 2.1 points year-on-year from August, according to statistics institute Destatis.

The evolution of the harmonized price index, which serves as a reference by the European Central Bank, peaks at + 10.9% over one year.

The monetary institution is determined to bring inflation in the euro zone back within its mandate, to 2%, which has already led it to raise its rates twice since July, by 1.25 points in all, before others not planned in the coming months.

In detail, prices in Germany remain driven by the ongoing explosion in energy prices, caused by the war in Ukraine. They rose 43.9% year on year in September.

German Chancellor Olaf Scholz announced on Thursday the release of 200 billion euros to precisely cap energy prices that weigh on households and businesses.

“A gas price cap could dampen inflation somewhat in the short term,” said Ulrich Kater, chief economist at Deka.

“Things will only really improve, however, if liquid gas transport capacities can be rapidly expanded over the coming year,” he adds.

Food prices also continue to rise, driven by war and droughts. Their increase reached 18.7% over one year, according to Destatis.

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Added to this are the price effects of continued supply chain disruptions due to the COVID-19 pandemic.

In addition, two measures in force this summer and which expired at the end of August – a discount on fuel and the monthly train ticket at 9 euros – “should have had an impact on the inflation rate” in September, adds Destatis without quantify the effect.

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