Energy Costs Push German Inflation Higher as ECB Prepares Rate Hike

Germans are facing higher prices due to rising energy costs, pushing inflation up by 2.9% in August from last year, according to preliminary figures from Destatis.

This increase is mainly attributed to a 10.5% surge in overall energy costs. Food and services inflation eased slightly. The US war against Iran has caused oil prices to soar, affecting the global market.

The European Central Bank (ECB) is expected to raise interest rates at its meeting on September 10 after a pause in July. ING economist Carsten Brzeski believes that 'most ECB policymakers are likely to see the case for another rate hike' with oil prices remaining elevated and the risk of a fresh gas price shock increasing.