German inflation rose to 8.5 per cent in July, driven by a surge in food prices, adding pressure on the European Central Bank to continue raising interest rates despite the mounting risk of a recession in the currency area.

While annual inflation in German food prices hit 14.8 per cent in July, up from 12.7 per cent in June, energy price inflation was 35.7 per cent, down from 38 per cent. Russia’s invasion of Ukraine and the subsequent disruption to energy supplies, as well as supply chain interruptions caused by the Covid-19 pandemic, were the underlying causes of the price pressures, said Destatis, the federal statistics agency, on Thursday.

Economists polled by Refinitiv had forecast an easing of Germany’s harmonised index of consumer price rises to 8.1 per cent, down from 8.2 per cent in June. The unexpected increase in Europe’s largest economy has shifted the focus to the eurozone, which reports fresh inflation data on Friday.