Germany sees biggest price increase in over 70 years

Inflation rate hits 7.9% in Germany, marking sharpest increase since data collection began in 1951

Inflation in Germany reached a new high of 7.9% in May 2022, according to the latest figures from the Federal Statistical Office.

This is the highest rate of inflation since data collection began in 1951 and is well above the European Central Bank's target of 2%.

What caused this?

The main factors behind the increase in inflation are rising energy and food prices. The war in Ukraine has led to a sharp increase in the cost of oil and gas, which has been passed on to consumers in the form of higher prices for goods and services.

The Covid-19 pandemic has also contributed to inflation by disrupting supply chains and pushing up the cost of production.

What does this mean for consumers?

The increase in inflation is putting a strain on household budgets, as consumers are having to pay more for essential goods and services.

This is particularly concerning for low-income households, who are more likely to spend a large proportion of their income on food and energy.

What is the government doing?

The German government is taking steps to address the issue of inflation, including providing financial assistance to low-income households and cutting taxes on fuel.

The government is also working with businesses to try to reduce the cost of production and keep prices down.

What is the outlook?

The outlook for inflation in Germany is uncertain. The war in Ukraine is ongoing and there is no sign of a let-up in the global energy crisis.

However, the German government is taking steps to address the issue and is hopeful that inflation will start to moderate in the second half of the year.