According to Bundesbank President Joachim Nagel, inflation in Germany could reach double digits in the autumn months. “The fuel discount and the nine-euro ticket are running out, which should increase the inflation rate by a good one percentage point,” said Nagel Rheinische Post. The gas surcharge is coming, in return the VAT on gas should be reduced, which in turn will dampen prices. “All in all, an inflation rate of ten percent is even possible in the autumn months.” Nagel made the historical dimension clear: “Double-digit inflation rates were last measured in Germany more than seventy years ago.” In the fourth quarter of 1951, according to the calculations made at the time, the inflation rate was eleven percent.
The President of the Bundesbank is not giving the all-clear for the coming year either. “The issue of inflation will not go away in 2023.” Russia has drastically reduced its gas supplies, and natural gas and electricity prices have risen more than expected. After the inflation rate for 2022 as a whole should be eight percent according to European calculations, Nagel expects a rate of six percent for the coming year.
Nagel called for further rate hikes by the European Central Bank (ECB). The next meeting will take place on September 8th. Nagel did not want to name a figure for a possible interest rate increase. “It will be crucial to keep medium-term inflation expectations stable at two percent. I am convinced that the Governing Council of the ECB will take the necessary monetary policy measures,” said the Bundesbank President. In July, the ECB raised interest rates by 0.50 percentage points.