Inflation expectations of German private households increased

04.07.2022

Inflation expectations of German private households increased

linkedin instagram twitter mail download
© Korta – stock.adobe.com

Berlin (APA/dpa-AFX) - The inflation expectations of private households in Germany have risen further. According to new data from the Bundesbank, expected inflation for the next twelve months rose from 7.0 per cent in the previous month to 7.5 per cent in June. This is the highest value since the survey began in 2019. A year ago, the corresponding value was much lower at just over 3 per cent.Berlin (APA/dpa-AFX) - The inflation expectations of private households in Germany have risen further. According to new data from the Bundesbank, expected inflation for the next twelve months rose from 7.0 per cent in the previous month to 7.5 per cent in June. This is the highest value since the survey began in 2019. A year ago, the corresponding value was much lower at just over 3 per cent.

Average expected inflation over the next five years rose to 5.4 per cent in June from 5.3 per cent. 84 per cent of respondents expect inflation rates to continue to rise over the next twelve months, while only 5 per cent expect inflation to decline. The firm anchoring of inflation expectations is considered an important goal of monetary policy, which functions primarily by managing expectations. If expectations become unanchored, there is a threat of high wage demands, which in turn can cause companies to raise prices. Economists speak of a wage-price spiral.

The European Central Bank (ECB) is aiming for inflation of two per cent for the euro area in the medium term. In fact, however, inflation in June was 8.6 percent - a record since the introduction of the euro. This is mainly due to high price increases for energy and raw materials as well as many intermediate products. The ECB has announced interest rate hikes to curb inflation. However, many other central banks have already acted and raised their key interest rates several times and significantly.

You might also be interested in

19.12.2023
Course "Foundation Board of Directors"
Read more
08.12.2022
2023 can only get better
Read more

You might also be interested in