FXstreet.com (Barcelona) - German CPI has risen 2.2% in the year 2007, due to higher energy prices, the VAT increase and the insurance tax, according to data released by Destatis, this is the largest year on year increase seen since the year 1994.

In December, CPI rose 0.5% from November and 2.8% from December 2006, the year-on-year rate has surpassed the 2.0% threshold or the fourth consecutive month. The reasons for such high inflation are, first the increasing energy prices, excluding energy, CPI would have risen 2.2% on the year. Second food prices, 6.0% higher in December 2007 than in the same month last year.

The 0.5% rise on the monthly CPI has to do with seasonal price trends, mainly for food and seasonal highlights, such as Christmas and new year's eve.