Germany's Inflation Cooled Slightly in November | GBAF

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Home > Top Stories > German inflation eased in November but too soon for ‘all-clear’

German inflation eased in November but too soon for ‘all-clear’

Published by Jessica Weisman-Pitts

Posted on November 29, 2022

3 min read

Last updated: January 20, 2026

Graph depicting Germany's inflation trends amid economic uncertainty - Global Banking & Finance Review — This image illustrates the inflation trends in Germany as of November 2022, highlighting the significant impact of rising energy and food prices on the economy. It connects to the article discussing inflation rates and economic pressures in Germany.

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.

Compared with October, prices were unchanged, the office added. Analysts had forecast a 0.1% month-on-month rise.

The annual increase 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

Energy prices eased 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 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 is likely to remain stubbornly high in 2023,” said Kraemer.

A one-off payment for household energy bills 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

Lower inflation in Germany and Spain are likely be reflected in November euro zone 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 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 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 growth.

Markets in recent weeks have been swinging back and forth between pricing a 50 and a 75 basis point hike 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.

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.

(Reporting by Miranda Murray, Rene Wagner and Balazs Koranyi, editing by Rachel More, Paul Carrel, Susan Fenton and Alexander Smith)