The Federal Statistical Office (Destatis) has confirmed an inflation rate of 2.4 percent for September 2025, a figure mirroring preliminary estimates released at the month’s close. This marks a consecutive rise after a period of decelerating inflation observed since the beginning of the year, following rates of +2.2 percent in August and +2.0 percent in both July and June.
Ruth Brand, President of Destatis, acknowledged the shift, stating that rising service costs remained a significant factor. Critically, she noted a “noticeable weakening” in the dampening effect of energy prices, a reversal impacting overall inflation trends. While energy product prices were 0.7 percent lower than the previous year, the rate of decline has slowed steadily for five consecutive months and significantly less pronounced than the reduction witnessed in August 2025. Fuel prices, in a concerning deviation from recent trends, rose by 1.1 percent – the first increase since May 2024 – while household energy prices saw a decrease of 1.9 percent. Consumers benefitted from cheaper prices for district heating (-2.2 percent), solid fuels (-1.8 percent) and electricity (-1.6 percent), though natural gas (+0.7 percent) and heating oil (+0.1 percent) registered slight increases.
Food prices, at 2.1 percent higher than a year ago, fell below the overall inflation rate for the first time since January 2025. However, this apparent relief is unevenly distributed, with significant price hikes still impacting specific categories. Sugar, jam, honey and other confectioneries led the increases (+6.5 percent), alongside fruit (+5.1 percent), dairy products and eggs (+3.6 percent) and meat and meat products (+3.2 percent). Conversely, cooking oils and fats experienced price decreases (-3.2 percent), as did vegetables (-2.1 percent). The broad spectrum of price changes highlights potential vulnerabilities within the food supply chain, evidenced by stark contrasts: a 21.2 percent increase in chocolate prices, juxtaposed with a 22.6 percent decrease in olive oil.
The inflation rate excluding energy demonstrates a more concerning picture, standing at 2.7 percent-marginally higher than the rates observed between June and August 2025. The core inflation rate – excluding both energy and food – also rose to 2.8 percent, indicating persistent inflationary pressures within other crucial sectors. This divergence highlights the limitations of attributing recent moderation solely to external factors.
Service sector prices continued to be a substantial driver of inflation, registering a 3.4 percent increase year-on-year, compared to 3.1 percent in both August and July. Significant increases were observed in combined passenger transport (+11.2 percent) and social facility services (+8.2 percent). Stationary healthcare services (+6.5 percent) and insurance premiums (+6.5 percent) also contributed significantly. Housing costs, including net cold rent (+2.0 percent), remain a persistent factor, demonstrating the impact on household finances.
A broader review of goods reveals a 1.4 percent price increase year-on-year (1.3 percent in August 2025). Consumer goods rose by 1.8 percent, while durable goods increased by 1.1 percent. Beverages, particularly coffee, tea and cocoa (+17.8 percent) alongside used cars (+5.6 percent), experienced notable increases, reinforcing concerns about consumer spending power. Modest increases were observed in areas like furniture and clothing, but the overall picture presents a challenging landscape for many households.
The consistent rise in core inflation and service prices, combined with the waning impact of energy price declines, raises doubts about the sustainability of recent easing and casts a shadow over the government’s long-term economic strategy. Further policy interventions may be required to address underlying cost drivers and mitigate the impact on German consumers.
