High energy and food prices pushed inflation in Germany above the 10 percent mark in October. Consumer prices rose by 10.4 percent compared to the same month last year, as the Federal Statistical Office announced on Friday in Wiesbaden based on preliminary data. An inflation rate of 10.0 percent was recorded in September. It was the highest value in about 70 years. According to economists, people have to adjust to further high inflation rates for the time being.
High inflation rates reduce the purchasing power of consumers, who can afford less for one euro. This can dampen private consumption as an important pillar of the economy. Consumers had to pay 43.0 percent more for energy in October than a year earlier. Food prices increased by 20.3 percent.
A rapid easing of inflation is not in sight for the time being. According to the Ifo Institute, people must continue to adjust to significantly higher prices when buying groceries. Around 97 percent of the grocers surveyed wanted to charge more. "The wave of inflation hasn't broken yet," said Ifo economic chief Timo Wollmershäuser. "Above all, the high energy costs have not yet been fully passed on to consumers."
According to preliminary data, consumer prices in Europe's largest economy rose by 0.9 percent in October compared to September.
The federal government wants to support consumers and companies with a protective shield of up to 200 billion euros because of the sharp rise in energy prices. A gas and an electricity price brake are also to be financed from this. However, details of the planned energy price brakes are still open. So far, the federal government has launched a one-off payment: the gas advance payments are to be taken over in December.
Inflation rates at the current level have never existed in reunified Germany. In the old federal states, rates of 10 percent and more were measured in the early 1950s, but the calculation method has changed over time.