The summit has been passed, but the patient is not over the hill.
This is how the latest inflation data for Germany can be summarized.
Mainly thanks to the state December discount for gas customers, consumer prices in December no longer rose in double digits, but “only” by 8.6 percent compared to the same month last year.
Further declines are to be expected in the coming months – albeit not in such large steps as in December.
Because the so-called core inflation, which does not include the volatile energy prices, remains at around 5 percent.
This is a sure sign that inflation has taken hold even where energy prices are not a major concern.
The European Central Bank is therefore still a long way from its goal of price stability and has no reason to deviate from its course of increasing interest rates - especially since there has been no collateral damage to the economy and the labor markets so far.
The specter of inflation could thus gradually lose its terror, but it is too early to give the all-clear.