Source: Sharecast
The increase to the annual inflation rate was largely driven by a sharp rise in energy costs, with energy prices were 8.3% higher year-on-year in July as the end of the government's temporary fuel‑tax cut on 30 June pushed motor‑fuel prices up 23%.
Heating oil also saw a steep increase of 34.7%, although overall household‑energy costs were still 1.4% lower than a year earlier due to declines in electricity, gas and district‑heating prices.
Food inflation remained subdued at 0.4% year‑on‑year, with higher prices for meat and confectionery offset by notable declines in edible oils, butter and dairy. Core inflation, excluding food and energy, stood at 2.4%, below the headline rate.
Goods prices were 2.5% higher than a year earlier, driven by non‑durables, while durable goods rose only 0.3%. Services inflation, on the other hand, eased slightly to 2.9%, with strong increases in social‑protection services, package holidays and vehicle‑repair costs. Rents rose 1.8% year‑on‑year.
On a monthly basis, July's 0.8% CPI rise reflected seasonal travel demand, with package holidays up 12.6% and international airfares up 7.1%. Motor‑fuel prices jumped 11.2% on the month following the expiry of the fuel discount, while heating oil rose 6.4%. Food prices were broadly flat, and clothing prices fell 5.4% due to seasonal factors.
"Energy prices continued to increase at an above-average rate and therefore remained the key driver of inflation. The rise in energy prices was much more pronounced than in the previous month, driving up the rate of inflation," said Ruth Brand, president of the Federal Statistical Office.
"In particular, motor fuel prices increased appreciably on the previous month. This was due to the discontinuation of the government fuel discount on 30 June, which coincided with the increase in the price of oil as a result of the ongoing Iran war."
Reporting by Iain Gilbert at Sharecast.com