German producer prices up from last year

German producer prices gained 7.8 percent in October from the same month a year earlier but were unchanged from September, data released on Thursday by the national statistics office showed.

Analysts polled by Dow Jones Newswires had forecast a drop of 0.7 percent on the month along with a more modest annualised increase of 7.1 percent.

In September, wholesale prices in the biggest European economy had risen by 0.3 percent and by 8.3 percent respectively.

“As in past months, energy prices had the most influence on the annual rate in increase,” the Destatis statistics service said, with a gain of more than 22 percent on the year.

When the cost of energy was stripped out, the producer price index rose by 2.9 percent, Destatis said.

The cost of natural gas for home heating gained 21.6 percent in October, meaning that families were likely to feel the squeeze as they head into the German winter even though consumer price increases have begun to ease.

From September to October, such gas prices rose by 6.8 percent, while the cost of electricity gained 0.1 percent on the month and 4.8 percent on the year, Destatis said.

Retail inflation fell to 2.4 percent in October, Destatis reported on November 14, a sharp drop from the level in September of 2.9 percent.

The consumer price index has begun to ease rapidly in Germany and across the 15-nation eurozone, providing more leeway for the European Central Bank to cut interest rates in a bid to boost economies like Germany’s, which are now in recession.