BERLIN (Reuters) – German inflation accelerated at a record pace in September, data showed on Thursday, underlining growing price pressures as Europe’s largest economy recovers from the pandemic and its companies grapple with supply shortages.

The Federal Statistics Office reported that consumer prices rose 4.1% in September compared to 3.4% in August.

It was the highest annual rate ever recorded since Jan 1997 when EU-harmonised data began.

According to a breakdown of data, the highest price rises were seen in energy and food products.

One-off causes for the rise in inflation this year include tax increases, supply bottlenecks, and price hikes. This has fueled a discussion about whether a very loose monetary policy is necessary.

According to the Bundesbank, German inflation will likely accelerate from its high levels. It is expected that it will remain above 2% until mid-2022. This exceeds the target set by the European Central Bank for the 19-nation Euro zone.

Fritzi Koehler-Geib, chief economist at state lender KfW said in a note that while one-off effects should disappear in the new year, other factors like and coal supply shortages could maintain the pressure on prices.

Energy prices have been rising due to other factors. For instance, the lack of natural gas and coal supply issues in Russia and Norway. Koehler Geib added that stocks have been depleted by the recent cold and that wind energy is experiencing a weather-related downturn.

Her comments were further emphasized by Koehler-Geib: “As such, energy prices will likely remain high through the end of this year with gasoline and electricity components driving them up steeply. For the remainder of 2018, headline inflation will remain at 3%, with electricity components pushing them up even more. In mid-2022, it should fall to 2%.