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By Rene Wagner and Matthias Williams<\/p>\n
BERLIN, May 13 (Reuters) – German wholesale prices climbed to a three-year high of 6.3% in April as the Iran \u200cwar pushed up the prices of energy and raw materials, official data \u200cshowed on Wednesday, compared to just 1.2% in February before the outbreak of hostilities.<\/p>\n
Rising inflation due to \u200bunprecedented disruption in global energy markets has raised the prospect of interest rate hikes and is another headache for Chancellor Friedrich Merz’s government as it struggles to gee up economic growth.<\/p>\n
“The decisive factor for the price increase in April 2026 was the hostilities in \u200cIran and the Middle East, \u2060which led to a rise in wholesale prices, particularly for energy products and raw materials,” the federal statistics office said.<\/p>\n
Petroleum products rose \u2060by 37.3% compared to April 2025. Global prices have spiked due to the virtual closure of the Strait of Hormuz, through which about a fifth of the world’s oil \u200band liquefied \u200bnatural gas (LNG) supply normally passes.<\/p>\n
German government bond \u200byields also hovered around multiyear highs \u200con Wednesday as markets expected the European Central Bank to raise rates by 75 basis points by year-end.<\/p>\n
German headline inflation accelerated to 2.9% in April.<\/p>\n
Companies are likely to pass on higher energy costs to customers, at least in part, said Felix Schmidt, an economist at Berenberg.<\/p>\n
“This will increase inflationary pressure, and the inflation rate is expected \u200cto jump above the 3% mark in May. \u200bWe are currently forecasting an inflation rate of \u200baround 3.2%.”<\/p>\n
Battling to stave off the \u200brise of the far-right Alternative for Germany (AfD) and trying to keep \u200ca lid on squabbles within his \u200bcoalition, Merz’s government has \u200bsought to cushion Germans from rising prices, but this has also been a bumpy process.<\/p>\n
The government introduced a measure for employers to provide workers a voluntary \u200btax-free relief bonus of \u200cup to 1,000 euros ($1,177), but the proposal ran into regional opposition from \u200bstates.<\/p>\n
(Reporting by Rene Wagner, Matthias Williams, Daria Bogdanska; writing by Matthias Williams; \u200bEditing by Linda Pasquini and Clarence Fernandez)<\/p>\n<\/p><\/div>\n