2 High inflation a challenge; decisive monetary policy response Ladies and gentlemen, the inflation rates recorded in Germany and the euro area over the past two years are unlike anything most of us have ever seen. Inflation in Germany peaked at 11.6% in October 2022. The last time it reached that kind of level was back in the 1950s.
One key factor driving these high inflation rates were problems on the supply side of the economy. First, disruptions to supply chains as a result of the coronavirus pandemic. Second, the reduced supply of energy commodities, particularly on account of Russia's war of aggression against Ukraine. That's rather like when a car's cylinder misfires. But demand was a factor, too.