# German inflation eased in November but too soon for ‘all-clear’ Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-11-29 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: German inflation eases but remains near record high - Meta Description: Get expert insights on Germany's record high inflation in November 2022. Understand the impact on prices, economic trends, and ECB policies. URL: https://financedigest.com/german-inflation-eased-in-november-but-too-soon-for-all-clearhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-11-29t130836z1lynxmpeias0jurtroptp4germany-economy-inflation-1736814798190-compressed.jpg) By Miranda Murray and Balazs Koranyi BERLIN (Reuters) – Germany’s inflation cooled slightly in November, but remained near a record high, suggesting that while cost pressures have eased in Europe’s largest economy they are unlikely to weaken the European Central Bank’s resolve to tame prices. German consumer prices, harmonised to compare with other European Union countries, rose by 11.3% on the year in November, preliminary data from the Federal Statistics Office showed on Tuesday, in line with forecasts by analysts polled by Reuters. October saw the highest reading since comparable data going back to 1996, with harmonized [inflation up 11.6% on the year](https://www.financedigest.com/spains-inflation-to-be-lower-this-year-than-in-2022-minister.html "Spain’s inflation to be lower this year than in 2022 -minister"). Compared with October, prices were unchanged, the office added. Analysts had [forecast a 0.1% month-on-month rise](https://www.financedigest.com/scaffolding-market-is-prophesied-to-rise-at-6-1-of-cagr-during-the-forecast-period-between-2018-and-2026.html "Scaffolding Market is prophesied to rise at 6.1% of CAGR during the forecast period between 2018 and 2026"). The [annual increase](https://www.financedigest.com/coca-cola-hbcs-annual-profit-beats-warns-of-price-increases.html "Coca-Cola HBC’s annual profit beats, warns of price increases") was due to higher costs for food and energy, which have grown considerably since the war in Ukraine began and have had a substantial impact, the office said. Graphic: Inflation breakdown https://graphics.reuters.com/GERMANY-ECONOMY/INFLATION/znpnbemnjpl/chart.png ![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/11/592.jpg) Energy [prices eased](https://www.financedigest.com/euro-zone-inflation-eases-in-feb-but-core-prices-pick-up.html "Euro zone inflation eases in Feb but core prices pick up") slightly in November but were still up 38.4% compared with the same period last year, while food prices had increased by 21%, according to the office. It is too [early to sound the all-clear because many utilities have announced significantly higher](https://www.financedigest.com/five-reasons-to-start-saving-early-for-higher-education.html "Five Reasons to Start Saving Early for Higher Education") electricity and gas prices for January,” said Commerzbank chief economist Joerg Kraemer, who added that November inflation eased only because prices for fuel and heating oil had calmed down somewhat. Underlying [inflation excluding energy and food](https://www.financedigest.com/average-annual-uk-food-bill-set-to-rise-454-pounds-as-inflation-soars.html "Average annual UK food bill set to rise 454 pounds as inflation soars") is likely to remain stubbornly high in 2023,” said Kraemer. A one-off payment for [household energy bills](https://www.financedigest.com/44-of-uk-households-are-worried-theyll-have-to-foot-the-bill-for-net-zero.html "44% of UK Households are Worried They’ll Have to Foot the Bill for Net Zero") in December and a planned price cap on gas and electricity has helped stabilize consumer sentiment, but the Bundesbank has warned that these relief measures may not be enough to bring inflation down from the double digits. Graphic: Marginally lower https://graphics.reuters.com/GERMANY-ECONOMY/INFLATION/xmvjkoyekpr/chart.png ![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/11/593.jpg) Lower [inflation in Germany and Spain are likely be reflected in November euro zone inflation data](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") to be published on Wednesday, with economists polled by Reuters expecting it to edge down to 10.4% in a flash reading after a record 10.6% on an annualised basis last month. Such a small step down is unlikely to change [ECB President Christine Lagarde’s assessment that euro zone inflation](https://www.financedigest.com/euro-zone-consumers-more-optimistic-on-inflation-ecb-survey-shows.html "Euro zone consumers more optimistic on inflation, ECB survey shows") has not yet peaked, which likely dampened speculation that the ECB was about to take a gentler path with future rate increases. The small drop, however, is likely to fuel the argument of dovish policymakers who argue that it is time for the [ECB to slow down rate hikes](https://www.financedigest.com/analysis-investors-stick-to-bets-on-early-end-to-ecb-hikes-as-uncertainty-grows.html "Analysis-Investors stick to bets on early end to ECB hikes as uncertainty grows") and proceed more cautiously as it is getting to a point where it restricts growth. The ECB has increased its rate on bank deposits by a [record 200 basis points to 1.5% in three months to dampen demand in a bid to lower price](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc.html "UK shop price inflation hits record 8% in January: BRC") growth. Markets in recent weeks have been swinging [back and forth between pricing a 50 and a 75 basis point hike](https://www.financedigest.com/uks-bellway-to-buy-back-shares-hike-social-housing-output.html "UK’s Bellway to buy back shares, hike social housing output") from the ECB on Dec. 15, but the peak in the deposit rate is still seen at around 3%, [suggesting another 150 basis points of hikes](https://www.financedigest.com/dollar-firms-after-u-s-labor-data-suggests-more-rate-hikes.html "Dollar firms after U.S. labor data suggests more rate hikes"). Adding to the case for caution at the ECB, euro zone economic sentiment rebounded more than expected in November, a separate indicator showed on Tuesday, suggesting that the bloc’s recession will be shallow and unlikely to significantly curb [price pressures](https://www.financedigest.com/oil-prices-dip-on-u-s-crude-reserve-release-inflation-pressure.html "Oil prices dip on U.S. crude reserve release, inflation pressure"). (Reporting by Miranda Murray, Rene Wagner and Balazs Koranyi, editing by Rachel More, Paul Carrel, Susan Fenton and Alexander Smith) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---