Germany: Inflation rises in June
Harmonized consumer prices increased 0.50% over the last month in July, following June’s 0.40% increase. The print reflected a notable uptick in energy prices, particularly due to pricier oil. Meanwhile, seasonality also played a role as prices for overnight stays and package holidays rose.
Harmonized inflation jumped to 3.1% in July from 2.1% in June. A low base effect played a role in driving up annual price pressures; in July 2020 the government temporarily reduced VAT rates until December 2020 as part of its fiscal response to the health crisis, lowering consumer prices. The economic reopening also fueled price pressures. Meanwhile, the trend pointed up, with annual average harmonized inflation coming in at 1.1% in July (June: 0.8%).