The rising prices across the board in Germany are driving inflation close to the eight percent mark. Goods and services were an average of 7.9 percent more expensive in August than a year earlier, as the Federal Statistical Office announced on Tuesday.
The high price increases for energy and food were again responsible for the high inflation in August. According to the statistics, the prices for energy increased by 35.6 percent compared to the previous year, those for food by 16.6 percent. Services, on the other hand, rose by 2.2 percent year-on-year.
According to statistics, consumer prices rose by 0.3 percent compared to July. Special effects such as the effects of the nine-euro ticket and the tank discount are included in the results, the Federal Office explained – the extent to which they affect cannot be shown with the preliminary results. The authority will publish detailed results for August on September 13.
Inflation had previously eased off for two months in a row – to 7.5 percent in July. Economists said in first reactions:
THOMAS GITZEL, CHEFVOLKSWIRT VP BANK:
“Measured by the current inflation rate and what is still to come, the ECB should actually launch a jumbo interest rate hike. The markets have meanwhile made their decision. The euro has had to lose some feathers in recent months “Parity against the US dollar fluctuates and is therefore massively undervalued,” says Bände. “On the foreign exchange markets, there is no expectation that the ECB will decide to raise interest rates significantly in the foreseeable future. But perhaps the pressure on the foreign exchange markets is needed to make the change the ECB’s mind.”
MICHAEL HEISE, CHEFÖKONOM HQ TRUST:
“The renewed significant increase in consumer prices in August shows that we are still a long way from a trend reversal in inflation. Slightly lower fuel prices were more than compensated for by other price increases. Food prices in particular have not yet reversed the sharp rise in the previous months.
Even heavier burdens in the coming months: We are facing a hot autumn. The inflation rate will continue to rise sharply as early as September, when government price reductions for fuel and passenger transport are abolished or reduced. Without new government measures, consumer prices will rise by more than nine percent, which is probably double-digit according to European calculation methods.”
JÖRG KRÄMER, COMMERZBANK CHIEF ECONOMIST:
“At 7.9 percent, inflation in August just missed a new 70-year high. But the gas levy and the end of the tank discount and 9-euro ticket are likely to drive inflation to ten percent by the end of the year. Hopefully it will struggle ECB through to a big rate hike of 0.75 percentage point at next week’s meeting. Action must now follow the words at the Jackson Hole conference.”
ELMAR VÖLKER, LBBW:
“The brief phase of slight easing on the price front, which occurred in June and July thanks to government relief measures, is already history again. And this is probably just the overture to a ‘hot autumn of inflation’. In September, the end of the tank discount and 9 -Euro ticket increases in price, followed by the gas surcharge in October. Although the latter effect will be mitigated by the planned reduction in VAT, a double-digit rate is to be feared in autumn, at least for the European calculation method (HICP).” (Reuters, AFP)