Soaring energy costs are pushing consumer prices higher

Inflation in Germany reached its highest level since 1981 in April, propelled by the surging prices of oil, gas and petrochemicals, official data indicates.

According to the Federal Statistics Office, consumer prices, harmonized to make them comparable with inflation data from other European Union states (HICP), increased at an annual 7.8% rate in April, up from 7.6% in March. Eurozone inflation hit a record high last month.

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

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The analyst added that “this reads as another clear request” for the European Central Bank to “finally give up its hesitancy in terms of exiting its ultra-loose monetary policy.”

The European Central Bank is expected to raise interest rates in the coming months in what would mark the first hike in more than a decade.

Energy prices in Europe have been pushing up costs, with producer prices in March seeing the biggest year-on-year surge since records began in 1949.

Germany is expecting an inflation rate of 6.1% this year and 2.8% in 2023, due to the impact of energy prices, Economy Minister Robert Habeck said earlier this week.

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