Germany: Inflation rate still around 2%, but core rate close to 3%

The inflation rate in Germany rose from 2.0% in October to 2.2% in November. The increase compared to the previous month is due to the fact that although energy was slightly cheaper in November than in October, the drop a year ago was significantly bigger. As a result, energy prices were only 3.7% lower than a year ago, after a year-on-year comparison of -5.5% in October. Food prices have hardly changed compared to October and were 1.8% higher than a year ago. If these two often very volatile components are excluded, the core inflation rate amounted to 3.0%, slightly higher than in the previous month and significantly higher than the ECB's actual target of 2%.

This higher core inflation rate is due to the continued very strong rise in service prices. As in previous months, these were around 4% higher in November than a year ago. The rise in the prices of goods (excluding energy and food) has been significantly weaker over the past 12 months. However, the inflation rate here has risen rcently after falling significantly from the beginning of 2023 to mid-2024.

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