Inflation was lower in October than in previous months thanks to cheaper energy prices. However, food continues to become more expensive, even if the price increase has slowed slightly.
Food was also the driver of inflation last month, as the Federal Statistical Office broke it down in detail in its inflation statistics. However, the increase in food prices eased slightly in October.
Year-on-year, they continued to rise at an above-average rate of 6.1 percent compared to October 2022; In the past few months, however, food prices have increased even more significantly: in August the price increase was 9.0 percent and in September it was 7.5 percent.
Strong different developments foods
The increase in goods from this area developed differently depending on the product group. The price increase was greatest for sugar, jam, honey and other confectionery (13.4 percent). Bread and grain products (10.9 percent), fruit (9.6 percent) and fish (8.6 percent) also rose significantly in price.
The prices for cooking fats and oils fell by an average of 13.3 percent. However, the development was inconsistent: While butter fell sharply by 27.5 percent and prices for sunflower and rapeseed oil also fell significantly, they rose by 38 percent for olive oil.
Overall inflation clearly declining
The Federal Statistical Office in Wiesbaden today confirmed its first estimate of overall inflation of 3.8 percent compared to the same month last year. In September, inflation was still at 4.5 percent. In the euro area, inflation fell even more significantly in October to 2.9 percent.
Prices for energy products were also largely responsible for the decline in October; they fell by an average of 3.2 percent compared to the same period last year. Fuel prices fell by 7.7 percent, natural gas was 13 percent cheaper, and light heating oil was even 28.2 percent cheaper than a year ago. Electricity, however, rose in price by 4.7 percent.
ECB could end interest rate hike cycle
Excluding the two particularly volatile areas of food and energy, so-called core inflation recorded an increase of 4.6 percent in October; In September the price increase was 4.3 percent.
For the European Central Bank, the development of consumer prices is an important indication for its further monetary policy. It is trying to curb inflation by increasing the key interest rate to the central bank’s target of around two percent. With inflation now declining, the central bank’s cycle of interest rate increases could also be nearing its end.