Expert analyzes: Lowest inflation since August - expensive shock over?

Expert analyzes: Lowest inflation since August - expensive shock over?

According to a report by www.bild.de, inflation in Germany fell to its lowest level since August 2021 in October. Consumer prices were 3.8 percent higher than in the same month last year, which is due to lower energy prices.

The decline in inflation is a positive development for consumers, as the steady price increases in recent months have put a strain on household budgets. In particular, the sharp increase in energy prices due to the major Russian attack on Ukraine led to a significant rate of inflation. The lower energy prices are now leading to relief for consumers, especially for light heating oil and natural gas, which were 28 percent and 13 percent cheaper, respectively, than in the same month last year.

The calculations show that lower energy prices have a significant impact on the inflation rate. The 0.7 percentage point decline from 4.5 percent in September to 3.8 percent in October is an indicator that market developments in energy prices are having a direct impact on overall inflation.

Overall, however, the inflation rate still remains high compared to previous years, suggesting that further developments in the energy market and global geopolitics continue to have the potential to influence prices. It is therefore important to closely monitor developments on the energy markets and the geopolitical situation in order to anticipate possible effects on the financial sector.