FRANKFURT - Bloomberg
German wholesale prices jumped the most in 26 years in May, increasing the inflation pressure in Europe's largest economy.
Wholesale prices surged 8.1 percent from a year earlier, the highest level since February 1982, the Federal Statistics Office in Wiesbaden said yesterday. From April, prices rose 1.4 percent.
ECB President Jean-Claude Trichet stepped up his inflation-fighting rhetoric on June 5, saying the bank may raise borrowing costs as soon as next month to fight inflation even with economic growth slowing. In Germany, surging oil and food prices pushed inflation to 3 percent last month and import prices increased more than economists expected in April.
�German prices for goods in the production pipeline are all on the way up,� said Stefan Bielmeier, an economist at Deutsche Bank in Frankfurt. �Price pressures remain high, which means that inflation risks will stay on the upside.�
German producer-price inflation accelerated to 5.2 percent in April from 4.2 percent in the previous month. Import prices unexpectedly held at 5.7 percent in April from a year earlier.
Wholesale prices of mineral oil products increased 21 percent in the month, the report showed. Prices of iron, steel and non-iron metals rose 9.1 percent in the year. Milk, dairy products, eggs and cooking oils were 16 percent more expensive from a year earlier.�The rise in consumer prices has gathered pace all over the world,� ECB council member Erkki Liikanen said in a statement published yesterday. In the euro region, �medium-term risks to price stability have increased. We have to ensure that inflation expectations remain firmly anchored.�