German inflation ticks lower
By Abigail Townsend
Date: Tuesday 13 Dec 2022
(Sharecast News) - German inflation nudged lower in November, official data showed on Tuesday, as energy prices softened.
According to Destatis, the Federal Statistics Office, the consumer price index was 10.0% year-on-year in November, compared to 10.4% in October, in line with consensus and the first estimate.
The harmonised index of consumer prices was unchanged on the previous month at 11.3%. All European Union countries use the same methodology to calculate HICP.
Georg Thiel, Destatis president, said: "The inflation rate remains at a high level despite a slight slowdown in energy prices.
"We see price increases for more and more other goods, in addition to energy. What has become particularly notable for households is the continuing increase in food prices."
Russia's invasion of Ukraine has seen both energy and food prices rocket across Europe. Destatis said Germany's energy product prices were 38.7% higher in November year-on-year, a slowdown on October's 43% jump. Compared with October 2022, energy prices dipped 1.2%.
Food prices spiked 21.1% year-on-year last month, however, building on October's 20.3% rise. High prices were seen across food groups, though there were "substantial" rises in edible fats and oils, dairy products and eggs, bread and cereals, and vegetables.
Once energy and food prices were stripped out, inflation was just 5.0%.
Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: "Looking ahead, the energy price cap is set to come into effect in January should keep a lid on energy inflation next year, though it is at this point unclear how it will be reflected in the CPI.
"We think the HICP rate, which matters for the European Central Bank, will snap back in December and remain elevated relative to the national CPI in the next few months., This in turn supports our call for a 50 basis point hike in February, following what we think will be a 50bp hike this week."
The ECB is scheduled to make its latest decision on interest rates on Thursday.
Germany - Europe's largest economy - confirmed a cap on gas and electricity prices for companies and households last month. The €54bn package comes into effect on 1 March but will be paid retroactively for January and February.
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