German producer prices rose 25 percent in January at the fastest pace in history as energy costs soared and widened a series of sharp rises that are expected to keep inflation around 5% for several more months.
The rise in PPI, considered a key indicator of consumer prices, was the largest since 1949, when West and East Germany were founded and the post-war economic data series began.
Analysts expected the rate to reach 24.2%, the same as in December. In October and November the percentage was 18.4% and 19.2% respectively.
“These continuous increases in factory prices before products go on the market suggest that ‘inflationary pressures remain high,'” said Commerzbank economist Ralph Sollen.
“We expect consumer prices in Germany to reach 5% in the autumn,” he added.
The inflation pattern in the eurozone’s largest economy is being copied everywhere in the eurozone, keeping up the pressure on the ECB as it thinks of the best way to bring about a smooth return to 2% inflation.
Source: Capital
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