Unexpected increase in inflation rate in Germany
reported by Mehr News Agency, based on new economic statistics, consumer prices In December, Germany increased by 2.9% compared to last year and by 2.4% compared to last month. That topped all analysts’ estimates in a Bloomberg survey. The German Statistics Center said that this acceleration was caused by energy and food costs.
After the release of these statistics, Germany’s short-term yield increased. The yield on two-year debt rose four basis points to 2.2 percent, as traders eased bets on a European Central Bank rate cut. They did.
Monday’s data follows the release of figures from Spain showing a faster-than-expected rise in prices of 2.8 percent on the month. It has been the past. Economists also predict that the inflation rate of the euro zone, which is to be announced on Tuesday, will increase to 2.4 percent.
In Germany, factors including nationwide public transport fare hikes and higher carbon prices have weighed on inflationary pressures ahead of early elections this month. The future, which looks set to end Olaf Schulz’s tenure as chancellor, is held high. is Like other incumbents, the cost-of-living crisis that followed Russia’s invasion of Ukraine in 2022 has implications for the German leader.
This year, the German central bank has seen the inflation rate decrease from 2.5% to 2.4% only once. Underlying prices are a key concern, especially in the service sector. Inflation in this part of the economy in the Eurozone is stuck around 4%, which is caused by the sharp increase in wages to compensate for inflation in recent years. According to national data, German services inflation has reached 4.1% from 4%.
After a fourth round of interest rate cuts last month, European Central Bank policymakers still agree they can cut further than the minimum Provide a neutral environment that neither restricts nor stimulates economic growth. While it is difficult to set in real time, investors expect interest rates to drop by around 100 basis points in 2025, which is the central bank deposit rate. to bring Europe to 2%.
