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German inflation surges to 3.8% in July, highest since 2008

HIgher energy prices, effect from a six-month sales tax cut

29 July, 18:08
(ANSA-AFP) - FRANKFURT AM MAIN, JUL 29 - German consumer prices accelerated at a faster-than-expected pace of 3.8 percent in July, preliminary data showed Thursday, breaching the three-percent mark for the first time since 2008. The last time inflation in Europe's top economy ran higher was in December 1993 (4.3 percent). The federal statistics agency Destatis blamed the year-on-year inflation hike in July mainly on higher energy prices and the full base effect from a six-month sales tax cut in 2020 showing up in the data for the first time. The VAT cut was introduced by Chancellor Angela Merkel's government to help mitigate the impact from the coronavirus shutdowns.

Analysts had expected a slightly smaller jump in the July figure but consumer prices worldwide have been rising steadily in recent months, fuelled by one-off effects linked to the pandemic. (ANSA-AFP).

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