Germany’s inflation rate has soared to the highest level since 1992, adding pressure to the European Central Bank to explain why it believes it is too early to tighten ultra-loose monetary policy.

According to the unified consumer price index, Germany’s inflation rate in November rose by 6% from the same period last year. This increase exceeded the expectations of most economists. Soon after Germany was reunified three years ago, the inflation rate remained at such a high level.

Spiral price is a sensitive topics In a country where the way people treat money is still plagued by hyperinflation in the 1920s and 1940s, this inflation destroyed most people’s savings.

However, the European Central Bank is trying to calm down the anxiety about rising prices, saying that many one-off causes of inflation, such as soaring energy prices and supply chain bottlenecks, will subside next year.

Isabel Schnabel, member of the Executive Board of the European Central Bank, in TV interview On Monday, Germany’s ZDF stated that “November will prove to be the peak of inflation in the country”.

She said that the inflation rate in Germany in the past two years averaged 2%, which dropped sharply when the pandemic hit in 2020, and then rose sharply in 2021. “There is no evidence that inflation is getting out of control,” she added. .

Eurozone inflation data will be released on Tuesday and is expected to reach 4.4% this month, the largest increase in 13 years and more than double the ECB’s 2% target.

Several factors indicate that German inflation will recede next year. First, the price rebound of the temporary sales tax cut last year will disappear from the inflation data in January. The record surge in restricting coronavirus cases announced this month could also cool consumer spending and prices.

“There is no doubt that inflation will fall next year: the only argument is the magnitude and speed of the decline,” Capital Capital’s macro economist Andrew Kenningan said.

The main driver of German inflation in November was energy prices, which rose 22% year-on-year. This helped to boost overall commodity prices by 5.2%. Food prices rose 4.5%, service prices rose 2.8%, and rents rose 1.4%.

Part of the increase in the CPI comes from changes in the weight of items in the basket, which reflects unusual spending patterns during the pandemic.

Germany is not alone in facing soaring inflation. According to data released on Monday, Spanish consumer prices have risen by 5.6% this month, the fastest growth rate since 1992. Prices in Belgium have also risen by 5.6% this month.

U.S. prices are rising faster, rising 6.3% year-on-year in October, the largest increase in 30 years.

The Fed has begun to respond relax Its bond purchase plan is widely regarded as a harbinger of a US interest rate hike next year.However, the European Central Bank has Postpone Investors are opposed to betting that it will raise interest rates in 2022.

Christine Lagarde, President of the European Central Bank, said last week that it was “wrong” to tighten monetary policy in response to the current surge in inflation and predicted price pressures when these measures take effect 18 months from now. Will fade away.

“We will cause unemployment and high adjustment costs, but we still cannot cope with the current high levels of inflation,” Lagarde Tell The Frankfurter Allgemeine Zeitung. “I would think that was wrong.”