Surprisingly, German manufacturers raised their prices at record speed in July because of expensive energy.

Producer prices rose by an average of 37.2 percent because gas and electricity in particular drove up the costs for producers.

"This was the highest year-on-year increase since the survey began in 1949," the Federal Statistical Office announced on Friday. Energy prices doubled because natural gas and electricity cost significantly more .0 percent calculated after the value had been 32.7 percent in June. From June to July producer prices increased by 5.3 percent. "This is also the highest increase compared to the previous month since the beginning of the survey," said it to.

Producer prices are considered to be the forerunners for the development of general inflation.

In the statistics, the prices are listed from the factory gate - even before the products are further processed or sold.

In July, consumer prices were 7.5 percent higher than a year earlier, after the inflation rate had reached 7.9 percent in May, the highest level since the winter of 1973/1974.

The fuel discount and nine-euro ticket are currently driving down inflation for consumers, but this state aid will expire at the end of the month.

Experts are therefore anticipating higher inflation rates of around nine percent in the autumn.

Inflation could come down

According to experts at Commerzbank, the "high point" in inflation should then be reached.

On the other hand, they do not expect a return to inflation rates of two percent any time soon, as the European Central Bank (ECB) is aiming for.

Wages in Germany are likely to rise noticeably in the coming year.

"And these costs are likely to be passed on to their customers," said Commerzbank economist Ralph Solveen.

"Finally, some long-term trends, such as unfavorable demographics, the cost of fighting climate change and rising protectionism around the world, argue for higher inflation."

The main reason for the sharp rise in producer-level inflation is energy, which has cost significantly more since the start of Russia's invasion of Ukraine on February 24th.

Producer prices here were 105.0 percent higher than in July 2021. Natural gas rose by 163.8 percent and electricity by 125.4 percent.

Petroleum products cost 41.8 percent more than a year earlier.

Light heating oil was more than twice as expensive as a year earlier (up 107.9 percent), while motor fuels were 31.6 percent higher.

There were also high price increases for intermediate goods, especially metals, fertilizers and animal feed, as well as industrial gases and packaging materials made of wood.

Food prices rose by a good 21 percent.

"The numbers do not give a hopeful outlook for the German manufacturing sector or the economy as a whole," said Accenture expert Thomas Rinn.

Manufacturers' margins are likely to remain under pressure.