Consumer prices in the UK rose at their highest rate since 1982 in June.

Goods and services cost an average of 9.4 percent more than a year earlier, the Office for National Statistics said on Wednesday in London.

Economists polled by the Reuters news agency had expected inflation of 9.3 percent, after an inflation rate of 9.1 percent in May.

In particular, rising prices for fuel, food and non-alcoholic beverages drove inflation higher.

"With further hikes in energy bills due from October, peak inflation is still a long way off," said Yael Selfin, chief UK economist at consultancy KPMG.

It is not to be expected that inflation will return to the two percent target before mid-2024.

Producer prices in Germany continue to rise - but less strongly

Christian Siedenbiedel

Editor in Business.

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Meanwhile, the momentum in price development in Germany at the producer price level seems to be weakening somewhat.

As the Federal Statistical Office announced on Wednesday, German manufacturers again raised their prices sharply in June as a result of the Ukraine war - but not at record speed.

Producer prices climbed by an average of 32.7 percent over the year.

In May the increase was still 33.6 percent and thus higher than at any time since the beginning of the survey in 1949.

From December 2021 to May, commercial producer prices had reached a new high every month.

In particular, the increase in energy prices in June weakened somewhat compared to May. In addition, the fuel discount made itself felt here, as in the figures for consumer prices.

In a month-on-month comparison, the prices for light heating oil in particular rose (up 20.1 percent compared to May 2022), while motor gasoline became 9.3 percent cheaper due to the temporary reduction in energy tax.

Diesel cost 1.9 percent more than a month earlier.

The development of producer prices often has an impact on consumer prices with a slight delay.

Recession could reduce price pressure in the medium term

After the prices for some commodities such as copper, nickel, zinc and oil fell due to fears of a recession, economists think it is possible that the price pressure could ease.

Holger Schmieding, chief economist at the Hamburg bank Berenberg, says: "In the course of the recession, the price pressure will ease considerably, we are already seeing the first typical harbingers of this." , says Schmieding: "With luck we reached the summit in September with a rate of over 9 percent in Germany."

While the fuel discount and 9-euro ticket for the train have recently pushed down inflation in Germany, inflation in the euro zone has continued to rise overall - and is also causing discussions in the European Central Bank (ECB).

According to the European statistics office Eurostat, inflation rose from 8.1 percent in May to a record 8.6 percent in June.

This confirmed a first estimate.

The inflation rate is already 20 percent or more in several euro countries: 22 percent in Estonia, 20.5 percent in Lithuania and 19.2 percent in Latvia.

In Spain, Belgium, Luxembourg, Slovenia, Greece and Slovakia, inflation rates are now in the double digits.

In Germany, the rate is 8.2 percent according to the European calculation method;

in a European comparison, this is still in the middle.

Prices are rising across the board.

Energy remains the most important driver compared to the previous year, with a year-on-year increase of 42 percent.

However, many foods also became significantly more expensive, with an average price increase of 8.9 percent.

The further increase in inflation in the euro area is also explosive because the ECB intends to decide on the further direction of monetary policy in the euro area on Thursday.

The first rate hike in the euro area in eleven years is expected.

So far, as reported, the vast majority of economists had only expected a small rate hike of 0.25 percentage points.

On Tuesday, however, the Bloomberg news agency reported, citing "circles", that the ECB Council could also discuss a larger rate hike of 0.5 percentage points on Thursday.

The reason for this is the deteriorated inflation environment.

Such a move would be a marked departure from the announcements that the majority of ECB Governing Council members have maintained since the previous June 9 meeting.

However, it would also bring the ECB closer to the global trend towards stronger rate hikes.

It is unclear whether there will be enough support for an increase of 0.5 percentage points.

Chief economist Philip Lane will present the official proposal at the meeting.

Lane has a relatively high weight in the central bank.

An ECB spokesman declined to comment, citing the bank's dormancy.

In any case, the President of the Munich Ifo Institute, Clemens Fuest, said that an increase in the key interest rate by at least 0.5 percentage points would be appropriate.

Many bank representatives had made similar statements.