German inflation climbs to 2.8% in July

Germany’s annual inflation rate increased to 2.8% in July from 2.4% in June, according to preliminary data released by the Federal Statistical Office (Destatis).

The rise, driven primarily by higher energy prices, marks a reversal from the previous month’s moderation and adds pressure on the European Central Bank (ECB) as it assesses the path for monetary policy.

Energy costs surged 5.7% year-on-year, while food prices rose 2.6%, contributing to the broader inflationary trend. Excluding energy and food, core inflation edged up to 2.9% from 2.7% in June.

The data follows recent ECB guidance suggesting policymakers remain cautious about premature easing despite signs of cooling inflation in the eurozone. The central bank is expected to maintain a restrictive stance until it is confident price pressures are sustainably returning to its 2% target.

Germany’s inflation print aligns with broader eurozone trends, where headline inflation ticked up to 2.6% in July, according to a flash estimate. The ECB’s next policy meeting is scheduled for September, where officials will weigh the latest economic data against growth risks.

Analysts note that while inflation remains above target, the pace of increase is uneven across sectors, with services inflation moderating slightly. The Bundesbank has previously warned of persistent price pressures in domestically driven services, which could delay any policy pivot.

The Federal Statistical Office is set to release detailed inflation components on August 13.