Consumer prices in Germany continue to rise rapidly.
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Frankfurt The inflation rate in Germany remained constant in February. Consumer prices increased by 8.7 percent compared to the same month last year. This was announced by the Federal Statistical Office on Wednesday based on a preliminary estimate.
Economists interviewed by the Reuters agency had expected this inflation rate in advance. In January, too, the inflation rate was 8.7 percent.
The capital markets were initially unimpressed. The Dax defended its daily gains of around 0.5 percent in the afternoon. Two-year Bunds are yielding 3.174 percent after yields rose as high as 3.215 percent at midday, a 14-year high.
The rise in energy prices has weakened again compared to the previous month as a result of the government relief measures and the somewhat relaxed market situation. Energy prices rose 19.1 percent year-on-year from January’s 23.1 percent. Food was 21.8 percent above the previous year’s level (January: 20.2 percent).
The Federal Statistical Office does not show a core inflation rate that does not take into account the price development for the volatile items energy and food. Core inflation is considered a good indicator of the medium-term price trend. The high core inflation in the euro area shows that prices are rising across the board.
Higher inflation in Germany and France
Inflation figures for France and Spain were higher than forecast on Tuesday. French inflation unexpectedly rose to 7.2 percent in February from 7.0 percent in January. This is the highest annual rate in the euro zone’s second largest economy since the single currency was introduced. In Spain, too, consumer prices rose more than expected at 6.1 percent.
The sharp increase in prices is exacerbating the debate about the future course of the European Central Bank (ECB). The latter last raised interest rates at the beginning of February and signaled another sharp hike for March. Then she wants to reassess the situation.
Bundesbank President Joachim Nagel believes that larger interest rate hikes are also possible in the months after March, he said at the presentation of the central bank’s annual balance sheet on Wednesday. He also advocated accelerating the ECB’s balance sheet rundown.
More: Investors are betting on stronger interest rate hikes by the ECB