According to the harmonized index of consumer prices, inflation in Germany rose by 6% in November from a year earlier. It was a much bigger rise than most economists had predicted. Inflation in Germany has not been this high since the country was reunified 30 years ago.
In a country where people's attitudes toward money are still colored by the hyperinflation of the 1920s and 1940s, which wiped out the savings of the majority of the population, rising prices are a touchy subject.
The ECB, on the other hand, has attempted to allay concerns about rising prices by stating that many one-off factors, such as rising energy prices and supply chain bottlenecks, will fade next year.
Isabel Schnabel, a member of the ECB's executive board, told Germany's ZDF on Monday that the country's inflation "will prove to be the peak" by November.
German inflation has averaged 2% over the past two years, having dropped sharply when the pandemic struck in 2020 before rising sharply in 2021, according to the German Chancellor's spokesperson. According to her, "there is no evidence that inflation is spiraling out of control."
It is expected that Eurozone inflation will reach 4.4% this month, the highest level in 13 years and more than twice the ECB's 2% target. The data will be released on Tuesday.
Several indicators point to a decline in German inflation next year. As a result of last year's short-term reduction in sales tax rates, prices have rebounded. Restrictions put in place this month to combat a record number of coronavirus cases could also reduce spending by consumers and raise prices.
“There is little doubt that inflation will fall next year: the only debate is how far and how fast,” said Andrew Kenningham, an economist at Capital Economics.