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Killer bacteria helps contain inflation

The Local · 28 Jun 2011, 15:59

Published: 28 Jun 2011 15:59 GMT+02:00

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Oil prices were up compared to the same period last year, but the cost of many vegetables plunged because of a nationwide scare over an E. coli bacteria outbreak that has claimed at least 47 lives, according to the provisional figures.

In the western state of Baden-Württemberg, one of six regions which provide data for the initial inflation estimate, the prices of lettuce, tomatoes and cucumbers dropped by more than 20 percent in June.

The government warned consumers about eating these vegetables before determining that the outbreak had most likely been caused by sprouts grown on a farm in northern Germany.

The inflation figure is unlikely to deter the European Central Bank (ECB) from hiking rates in July.

"The ECB cannot base its monetary policy simply on Germany's prosperous economy" but must take account of other eurozone countries in financial difficulty, the bank said in a statement last week.

Andreas Rees, an economist at Unicredit bank, also sees "inflation raising its ugly head" again soon as firms pass on to customers the cost of higher raw materials.

Story continues below…

In May, the cost of imports into Germany climbed by 8.1 percent over the year in part because of higher metal prices, according to official data also released on Tuesday.


The Local (news@thelocal.de)

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Your comments about this article

16:34 June 28, 2011 by William Thirteen
not sure we should be basing our monetary policy on the doings of single-celled life forms!
09:45 June 29, 2011 by freechoice
47 lives for containing inflation? that is a heavy price to pay.
17:57 June 29, 2011 by Englishted
@ freechoice correct.

@William Thirteen why not? Chancellor Angela Merke is a life form with a single braincell .
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