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High inflation here to stay for coming months, says German industry

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Germany’s inflation rate is unlikely to decline rapidly at present and the European Central Bank’s target of 2 percent will only become feasible by the middle of the decade, the BDI industry association said in a survey for Reuters published on Friday.

BERLIN –

Inflation, which slowed slightly to 11.3 percent in November from a high of 11.6 percent the month prior, is no longer driven primarily by energy costs but by a host of factors, BDI president Siegfried Russwurm said in a survey of several industry associations.“A return to a level of 2 percent is likely to take longer and can only be achieved by the middle of the decade if monetary policy takes effect,” he said.

The ECB has raised interest rates by a combined 2.5 percentage points since July – its fastest pace of monetary tightening on record – to counter inflation.

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