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German inflation rate hits lowest since August 2021 amid falling energy prices

EditorPollock Mondal
Published 11/08/2023, 02:44 AM

The German inflation rate in October has dropped to its lowest level since August 2021, according to data from Destatis. This decline was primarily due to a decrease in energy and fuel prices, which fell by 3.2% and 7.7% respectively year-on-year. Consumer prices rose by 3.8% compared to last year, marking a decrease from September's 4.5%.

Despite this overall reduction, Ruth Brand, president of Destatis, pointed out that inflation remains high compared to medium and long-term figures. This is particularly evident in food prices, which saw a year-on-year increase of 7.5% in October. Within this category, sugar, jam, and honey prices experienced a significant surge of 13.4%.

Excluding volatile food and energy prices, the core inflation rate fell to 4.3% from September's 4.6%. This shift supports the argument that the European Central Bank (ECB) may have reached the peak of its rate-hiking cycle, leading to speculation about when it will reduce its deposit rate from the current 4.0%.

These recent trends and figures align with preliminary estimates and a consensus among economists polled by The Wall Street Journal. The falling inflation rate suggests that the ECB could be nearing the end of its cycle of raising rates, a development that will be closely monitored by investors and policymakers alike.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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