The fuel discount and nine-euro ticket caused the German inflation rate to fall in July for the second month in a row.

Goods and services cost an average of 7.5 percent more than a year earlier, the Federal Statistical Office confirmed an earlier estimate on Wednesday.

In May, the rate of inflation was 7.9 percent, the highest since the winter of 1973/74, before falling to 7.6 percent in June due to government relief.

However, experts warn of increasing inflationary pressure in autumn, when not only the fuel discount and the nine-euro ticket expire, but also when the gas levy is also levied from October.

"This represents a massive increase in costs for citizens," said Commerzbank chief economist Jörg Krämer.

For an average household with an annual consumption of 20,000 kilowatt hours, additional costs of between 300 and 1000 euros per year can be expected.

"In extreme cases, the end of the nine-euro ticket and the tank discount, the usual gas price increases and the gas levy will drive up the German inflation rate by around three percentage points," said Krämer.

"The inflation rate would then be in double digits in the fourth quarter."

food prices go up

Energy rose 35.5 percent in July due to the Russian war against Ukraine and remains the number one price driver.

However, the increase in June was even higher at 38.0 percent.

The price premium for electricity was 18.1 percent and has weakened primarily as a result of the abolition of the EEG surcharge (June: +22.0 percent).

Also as a result of the tank discount, fuel prices only increased by 23.0 percent (June: +33.2 percent, May: +41.0 percent).

The prices for light heating oil have more than doubled within a year.

The prices both for train tickets in local transport (-43.9 percent) and for combined tickets for train, bus and the like (-63.0 percent) fell sharply because of the nine-euro ticket.

Food, on the other hand, cost 14.8 percent more than in July 2021. "This means that price inflation has increased for the fifth month in a row," emphasized the statisticians.

Edible fats and oils (+44.2 percent) as well as dairy products and eggs (+24.2 percent) became significantly more expensive.

Meat and meat products cost 18.3 percent more.

In July, the European Central Bank (ECB) raised its key interest rate for the first time since 2011 in view of the record high inflation in the monetary union and intends to do so again in September.

This increases the cost of borrowing for both consumers and businesses, which is likely to further impact consumption and investment.

This in turn could add to the already weakening economy.