German Inflation Accelerates to 2.8% in July as Fuel Subsidy Ends

Germany's Federal Statistical Office (Destatis) confirmed on August 12 that the consumer price index rose 2.8% year-on-year in July 2026, up from 2.3% in June and continuing a re-acceleration from May's 2.6%. Energy prices were the principal driver, up 8.3% YoY — with motor fuel up 23.0% and heating oil up 34.7% — after the government's fuel-subsidy programme lapsed on June 30. Core inflation (excluding food and energy) stood at 2.4%, services rose 2.9%, and food prices rose a modest 0.4%. Destatis president Ruth Brand said energy prices 'continued to increase at an above-average rate and therefore remained the key driver of inflation.' Economists warned that record-low water levels on the Rhine, which restrict cargo and fuel-refinery logistics, could add a further 0.5 percentage points to inflation in coming months.