German annual producer price inflation hit its highest level in more than 23 years in November despite a slight drop in prices compared with October, Federal Statistics Office data released today showed.
Prices rose by 5.0 per cent from November 2004, the biggest annual gain since the 5.1 percent seen in August 1982.
Month on month, prices fell by a smaller-than-expected 0.1 per cent after a gain of 0.7 per cent in October. The mid-range forecast of 28 economists polled by Reuters was for prices to fall 0.3 per cent month on month, and rise by 4.9 per cent year on year.
Forecasts for the annual rate ranged between rises of 4.1 to 5.2 per cent.
In a statement, the Office said a big increase in energy costs and a base effect were responsible for the annual gain.
"The fresh rise in the annual rate occured despite a slight month-on-month fall in prices, because the larger decrease in prices observed in November 2004 is no longer factored into the calculation of the annual rate," the Office said.
DZ Bank economist Bernd Weidensteiner said although the data showed that price pressures had eased somewhat compared to October, the European Central Bank would not be happy that annual producer price inflation was so high.
"However, if prices continue to ease in December and January, then the ECB may be able to take the view that the inflationary threat is no longer so acute," he added.
Month on month, the price of mineral oil products fell by 6.5 percent, with fuels 5.8 percent cheaper and the cost of light heating oil down almost 11 percent. Excluding mineral oil products, producer prices rose by 0.4 percent from October.