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Energy prices bump German inflation to four-decade high

Published 28/04/2022, 10:52 pm
© Reuters. FILE PHOTO: A general view of a fruit and vegetable stand on a weekly market in Berlin, Germany, March 14, 2020.  REUTERS/Annegret Hilse

BERLIN (Reuters) -German inflation hit its highest level in more than four decades in April, pushed higher by natural gas and mineral oil products that have significantly increased in price since Russia's attack on Ukraine.

Consumer prices, harmonised to make them comparable with inflation data from other European Union countries (HICP), rose an annual 7.8%, a rise from March's 7.6%, the Federal Statistics Office said on Thursday.

The inflation reading from Germany, the biggest euro zone economy, precedes data on Friday for the whole 19-country bloc. Euro zone inflation hit a record high in March.

A Reuters poll of analysts had pointed to an overall annual German HICP reading of 7.6% in April.

According to the statistics office, the last time a similarly high inflation rate was recorded in Germany was in autumn 1981, as a consequence of the first Gulf War.

"The hoped-for slight easing of inflationary pressure, which seemed tangible in view of the fall in petrol prices, once again failed to materialize," said LBBW bank analyst Elmar Voelker.

For the European Central Bank, "this reads as another clear request to finally give up its hesitancy in terms of exiting its ultra-loose monetary policy," added Voelker.

ECB Vice President Luis de Guindos said on Thursday the central bank needs to keep a close eye on the recent rise in inflation expectations above its 2% target.

A key gauge of euro zone long-term inflation expectations was at 2.4% around its highest level in a decade.

© Reuters. FILE PHOTO: A general view of a fruit and vegetable stand on a weekly market in Berlin, Germany, March 14, 2020.  REUTERS/Annegret Hilse

Energy prices have been pushing up costs, with March producer prices - the first month to reflect the war in Ukraine - seeing the biggest year-on-year jump since records started in 1949, spelling bad news for consumer inflation.

The German government sees an inflation rate of 6.1% in 2022 and 2.8% next year, citing the effects of energy prices in Europe's biggest economy, the economy ministry said on Wednesday.

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