Surging vegetable prices help push German inflation to 2.2%
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The Great European Vegetable Crisis?
Germany’s annual rate has been confirmed at its highest pace in four years at 2.2 per cent in February pushed up by the rising cost of fresh veg.
Stats office Destatis issued a second inflation reading in line with its first estimate and up from 1.9 per cent in January. It is the first time German inflation has exceeded the eurozone’s target level since 2013.
Prices in Europe’s largest economy were pushed up by a 7.2 per cent surge in energy costs last month compared to February 2016, a more than 4 per cent climb in the cost of food and a whopping 21 per cent rise in vegetable prices.
Lettuce, tomatoes and cucumbers were among the items becoming significantly more expensive for the German consumer last month,with Germans, as well as Brits, also suffering the effects of a Europe-wide shortage of lettuce following bad weather in Spain and Italy, with prices up 141 per cent. Aubergine prices rose more than 80 per cent.
Inflation across the eurozone has risen at a faster pace than expected by policymakers in recent months as energy prices have rebounded following a global slump last year.
Still, the European Central Bank expects inflationary pressures to subside over the latter half of the year and thinks prices will still undershoot target at just 1.7 per cent in 2019.
ECB president Mario Draghi has declared victory over the bloc’s battle with deflation but has been more cautious on proclaiming success over meeting the bank’s target of average inflation of just under 2 per cent.
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