German inflation falls to 2.8% in October as fuel discount takes effect

Inflation falls below 3% on the fuel discount

Germany's annual inflation rate was 2.8% in October 2026, according to the Federal Statistical Office (Destatis), which confirmed on 11 November the preliminary figure it published on 30 October. The rate was 3.3% in September and 2.9% in August, and the drop of half a percentage point was the smallest annual increase since July, according to Europa Press. Consumer prices fell 0.2% month on month, and the harmonised rate used by Eurostat also stood at 2.8%.

2026-08

2.9 %

2026-09

3.3 %

2026-10

2.8 %

Data from the article text

Fuel discount cuts the headline rate

The fuel discount, reintroduced on 1 October and valid until the end of the year, lowered the energy tax on petrol and diesel by enough to save up to 17 cents per litre including VAT. The same relief had applied in May and June. Destatis president Ruth Brand said energy prices remained the main driver of the high inflation rate, though the discount had probably dampened it somewhat. Fuel prices still rose 28.9% on the year, and heating oil jumped 84.5%, which the institute linked to the Iran conflict and supply problems for crude oil, natural gas and other products.

Heating oil84.5%

Fuels28.9%

Energy12.2%

Goods3%

Services2.5%

Core inflation2.1%

Food0.4%

Butter-18.9%

Heating oil

84.5 %

Fuels

28.9 %

Energy

12.2 %

Goods

3 %

Services

2.5 %

Core inflation

2.1 %

Food

0.4 %

Butter

-18.9 %

Data from the article text

Energy and food prices

Energy prices rose 12.2% on the year in October, down from 14.9% in September according to tagesschau and N-tv. Europa Press gives the September figure as 14.6%. Food prices rose 0.4%, the same as in September. Eggs were 15.4% dearer, fresh vegetables 11.5% and fish 4.5%, while butter fell 18.9%, dairy products 4.7% and fresh fruit 2.8%. Goods rose 3% and services 2.5%, against 2.7% in September. Core inflation, which excludes energy and food, eased to 2.1% from 2.4%.

Why economists expect the dip to be temporary

Economists quoted by Der Tagesspiegel regard the drop as temporary, since the Tankrabatt runs only to year-end and the conflict between the United States and Iran, which has driven energy prices since late February, remains unresolved. DWS economist Ulrike Kastens expects higher gas prices to weigh on households in the coming months, and she expects food prices to rise after the summer heatwave, particularly for seasonal foods. Leading research institutes forecast that inflation will climb from 2.8% this year to 3.2% in 2027, which would erode purchasing power further.

What comes next

Silke Tober of the IMK institute at the Hans Böckler Foundation, which is close to the trade unions, said the marked fall in crude oil prices since the US congressional elections could push inflation down further in November. She cautioned that diesel prices have barely eased because of refinery bottlenecks, and that wholesale gas prices remain very high. Many economists expect the European Central Bank to raise its key rate again in December. The ECB has already raised it twice this year, to 2.50%.