German consumer prices hit a 29-year high in November, preliminary data showed Monday, as soaring energy costs and supply chain disruptions weigh on Europe's top economy.
The annual inflation rate rose by 5.2%, accelerating for the fifth month in a row, with the surge partially driven by a 22% jump in energy prices, federal statistics agency Destatis said.
In October, prices had climbed by 4.5% year-on-year basis.
Germany's Bundesbank said earlier this month that inflation could spike to just under 6% this year.
The higher cost of living is being experienced across the eurozone at the moment, putting pressure on the European Central Bank (ECB) to tighten its ultra-loose monetary policy.
The ECB has so far insisted that the inflation surge in the 19-nation zone is transitory and is wary of acting too soon and potentially stifling the pandemic recovery.
But Bundesbank Chief Jens Weidmann, who is stepping down at the end of the year, has warned that the price hikes could last longer than expected.
Using the ECB's preferred yardstick, the Harmonised Index of Consumer Prices (HICP), German inflation jumped to 6% in November – well above the bank's 2% target.
Higher demand after the easing of coronavirus restrictions has pushed up energy prices and led to shortages of key materials and labor worldwide.
But Germany also suffers from the comparison effect with 2020, when the country introduced a temporary sales tax cut, as well as the introduction of carbon pricing at the start of 2021, according to Destatis.
Carsten Brzeski, an economist at ING Diba bank, called November's inflation figure "a shocker" but said the peak is yet to come.
"The December inflation number could be a new record high since German reunification," he said.
"One-off factors like base effects from higher energy prices and post lockdown price markups" will "gradually start to abate," he added.
"However, it could take until the end of 2022 before headline inflation drops below 2%, if not until 2023."
