Fuel discount curbs inflation: inflation falls below the three percent mark

Anyone who wants to shop has to be tough at the moment. Prices go up and up. At least a little less in October than in the previous month. There is one main reason for this.

The fuel discount has noticeably curbed the high inflation in Germany. Goods and services rose in price on average by 2.8 percent in October compared to the same month last year, as the Federal Statistical Office confirmed its earlier estimate. Record high prices for gasoline and diesel as well as expensive heating oil drove consumer prices up by 3.3 percent in September, the fastest they have been in almost three years. “The development of energy prices remained the main reason for the continued high inflation rate, even if the fuel discount that was reintroduced at the beginning of October may have dampened inflation somewhat,” said the President of the Statistics Office, Ruth Brand.

Fuel prices rose by 28.9 percent in October compared to the same month last year, and heating oil by as much as 84.5 percent. The federal government has introduced relief for drivers. A new fuel discount has been in effect since October 1st until the end of the year - a subsidy that already came into effect in May and June. This is likely to reduce fuel prices by up to 17 cents per liter.

Overall, energy prices rose by 12.2 percent in October compared to the same month last year, after 14.9 percent in September. That was the biggest increase since February 2023. Food costs an average of 0.4 percent more (September: +0.4 percent). Eggs (+15.4 percent), fresh vegetables including potatoes (+11.5 percent) as well as fish, fish products and seafood (+4.5 percent) became significantly more expensive, while butter (-18.9 percent), dairy products (-4.7 percent) and fresh fruit (-2.8 percent) cost less than a year ago.

2.5 percent more were charged for services (September: +2.7 percent). Prices excluding food and energy, also known as core inflation, only rose by 2.1 (September: 2.4) percent. From September to October, consumer prices fell by a total of 0.2 percent. Since inflation is also elevated in the euro zone as a whole, many economists expect the European Central Bank (ECB) to raise interest rates again in December. This has already raised its key interest rate twice this year - to currently 2.50 percent.