Germany’s August inflation slowed to 0.3%

Inflation in Germany slowed down in August to 0.3% versus 0.9% in July, in line with expectations, but on an annual basis, inflation rose to 7.9% in line with expectations, continuing above 7%.

The main reason for the rise in inflation remains the high prices of energy and food products, as the head of the Federal Statistical Office said: “Two measures of the relief package had a slight downward impact on the overall inflation rate, especially from June to August 2022, namely, the 9 euro ticket and the fuel tax.”

The €9 ticket for public transport, which was introduced on June 1, 2022 for a period of 3 months, had a downward impact on regional public transport prices and short-distance passengers for the last time in August 2022, as well as a lower fuel tax positively impacting the decline in motor fuel prices as of June 2022.

In addition, the sources told Reuters that policy makers at the European Central Bank see increased risks that they will have to raise the key interest rate to 2% or more to curb record inflation in the euro area.