German consumer prices hit a 29-year high in November, preliminary data showed on Monday, as soaring energy costs and supply chain bottlenecks weigh on Europe’s top economy.

The annual inflation rate rose to 5.2 per cent, accelerating for the fifth month in a row, with the surge partially driven by a 22-per cent jump in energy prices, federal statistics agency Destatis said. In October, prices had climbed by 4.5 per cent year-on-year.

Germany’s Bundesbank central bank said earlier this month that German inflation could spike to just under six per cent this year.

The higher cost-of-living is being experienced across the eurozone at the moment, putting pressure on the European Central Bank to tighten its ultra-loose monetary policy. The ECB has so far insisted that the inflation surge in the 19-nation zone is transitory, and is wary of acting too soon and potentially stifling the pandemic recovery. But Bundesbank chief Jens Weidmann, who is stepping down at the end of the year, has warned that the price hikes could last longer than expected.

Using the ECB’s preferred yardstick, the Harmonised Index of Consumer Prices (HICP), German inflation jumped to six per cent in November – well above the bank’s two per cent target.

Higher demand after the easing of coronavirus restrictions has pushed up energy prices and led to shortages of key materials and labour around the world.

But Germany also suffers from the comparison effect with 2020, when the country introduced a temporary sales tax cut, as well as the introduction of CO2 pricing at the start of 2021, according to Destatis.

Carsten Brzeski, economist at ING Diba bank, called November’s inflation figure “a shocker” but said the peak had yet to come

Carsten Brzeski, economist at ING Diba bank, called November’s inflation figure “a shocker” but said the peak had yet to come. “The December inflation number could be a new record high since German reunification,” he said. “One-off factors like base effects from higher energy prices and post-lockdown price mark-ups” will “gradually start to abate”, he added. “However, it could take until the end of 2022 before headline inflation will drop below two per cent, if not until 2023.”