BERLIN, Nov. 29 (Reuters) – Consumer price hikes in Germany rose further in November to a new high, according to preliminary data released on Monday, increasing pressure on the European Central Bank to react.

Consumer prices, harmonized to make them comparable with inflation data from other European Union countries, rose 6.0% year-on-year after rising 4.6% in October, the report said. Federal Statistical Office.

Reading was the highest recorded since January 1997, when the EU harmonized series began.

The National Consumer Price Index (CPI) rose 5.2% year-on-year, the highest rate since June 1992.

ECB board member Isabel Schnabel told ZDF television on Monday that the central bank believed inflation peaked in November, meaning it would be premature to raise rates as price increases are expected to gradually slow down next year. Read more

Preliminary eurozone inflation data expected on Tuesday should show a rise to 4.5% in November from 4.1% the previous month.

The ECB is targeting an inflation rate of 2%.

DOWNWARD TREND TO COME?

The recent spike in inflation is caused by a combination of several factors, including base effects, higher energy prices, a temporary VAT rate linked to the pandemic the previous year, and material shortages in the country. during the recovery.

“Although inflation rates will remain at a relatively high level over the next few months, a downward trend should be noticeable,” said Thomas Gitzel, VP Bank analyst.

“If there are no second-round effects, the ECB’s 2% target should already be met again by mid-2022,” Gitzel said, adding that the ECB would react calmly. to the latest data.

Commerzbank economist Joerg Kraemer was more alarmed by the new figures, calling it a worrying sign that seasonally adjusted consumer prices had risen unusually strong during the month.

“In addition, prices are now increasing on a broader front, it is no longer just energy and certain goods particularly affected by the coronavirus pandemic,” Kraemer added.

While he acknowledged that inflation was likely to fall again after the start of the year due to some special factors, Kraemer said there was too much money in circulation in the eurozone due to the high budget deficits and ECB bond purchases.

“The ECB should take its foot off the accelerator, stop buying bonds and end the negative interest rate policy,” Kraemer said.

Reporting by Michael Nienaber, editing by Zuzanna Szymanska and Andrew Cawthorne

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