Germany saw its consumer prices hike the highest on record–a staggering 8.8% in August vis-a-vis its counterpart last year.
According to the country’s statistics office, rising food and energy costs heavily drove the increase in the basket of goods prices. The impact, however, was offset by temporary government aid, including a fuel rebate and ultra-cheap public transport that are set to expire soon.
Deutsche Bundesbank predicts the figure could hit 10% in Q4 2022, but classifies the situation as highly uncertain given the “unclear situation” in the global supply chain.
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The recent inflation figure of Europe’s biggest economy bolsters a call for a fresh interest rate hike that would follow European Central Bank’s 50 basis-point hike back in July. This decision was based on June numbers where Germany’s inflation rate was at 8.2% and the Eurozone inflation was at 8.6%.
The policy makers are expected to hike another 0.5% but arguments have been made for increasing an aggressive 0.75% to combat the soaring inflation rates.
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