According to the Federal Statistical Office, consumer prices rose 4.5% in October compared to the same month last year. The Wiesbaden authority last measured an inflation rate of 4.5% in 1993.
In September, inflation had already passed the four percent mark to 4.1 percent.
Compared with September, consumer prices rose 0.5% in October.
Imported goods increased by almost 17% – as much as they did during the second oil crisis in 1981.
Over the years, natural gas imports have increased 178%, while electricity has increased 136% year-on-year.
Coal and iron ore also saw the price of imports increase by 118% and 97% respectively.
In addition, the abolition of the temporary VAT cut is now fully effective.
Normal VAT rates have been in effect again since January 2021, so goods and services tend to become more expensive again.
It is estimated that inflation rates of around 5% are possible until the end of the year.
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âSo far, it has been safe to say that the rise in inflation is temporary.
“But the now significantly higher commodity prices change the starting position.”
Mr. Gitzel warned that rising gas prices could impact electricity prices.
He added: âThis means that there is a risk that the selective price increases so far will eat away at a large part of the economy.
“The price ripple effect of the shortage will therefore be with us longer than originally expected.”
The reason for the shortages is due to the almost synchronous economic recovery after the coronavirus pandemic.
Hendrik Tuch, Chief Asset Management Strategist Aegon AM, added: âIn order to meet the EU’s rather ambitious climate targets, massive investments are needed to reduce CO2 emissions.
âThe investments made by companies and governments to reduce CO2 emissions require a lot of additional materials, which drives up the prices of these raw materials. “
Earlier this month, the Bank of England stepped up its warning about rising inflation after admitting that soaring gas prices and supply chain problems are preventing the economy from growing so fast that she had foreseen.
The Monetary Policy Committee, which voted unanimously to keep interest rates at an all-time low of 0.1%, warned that soaring household energy bills could push inflation above 4% by the end of the year and the middle of next year.
They also lowered their expectations for the recovery of Covid, with gross domestic product expected to be 2.5% below pre-pandemic levels in the third quarter of this year.
The challenges behind the warning include the additional costs associated with the shortage of workers, delays in global supply chains and soaring energy prices, as well as a record increase in wholesale costs. some gas.
In a letter to Chancellor Rishi Sunak, Governor Andrew Bailey said the economy had been “subjected to some of the greatest shocks” for centuries and that economic activity was “exceptionally volatile”.
Additional reporting by Monika Pallenberg