In Frankfurt’s main shopping street, early Christmas window displays try to attract passersby. But German consumers, who are worried about the recent surge in inflation, are cautious about spending money.

Maria, a 40-year-old social worker, said: “I have a deep understanding.” Due to rising prices, she delayed buying jewelry and electronics. “When I was shopping with my mother, I noticed that gold rose from 1,500 Euros to more than 1,700 Euros. [per ounce] Only one week. ”

German inflation, measured by the Unified Consumer Price Index, rose by 4.6% in October from the same period last year-the highest level since the country’s reunification three years ago. It is widely expected that it will exceed 5% by December.

Hyperinflation in the 1920s and 1940s destroyed the savings of most Germans, and people’s attitudes towards money still plagued the country. Spiral prices are a sensitive topic.

Amid criticism of the ECB’s ultra-loose monetary policy, this issue is becoming the agenda of a new government—still being formed after the September election.

Carsten Brzeski, head of macro research at ING, said: “Germany is a country of savers, and the inflation debate is related to whether people feel that they are being robbed by these negative interest rates.” “Some parts of the country suspect that the European Central Bank is just trying to protect the debt-ridden southern European countries. It’s not about their interests.”

Lin En, a 33-year-old elementary school teacher, said that her school colleagues often discuss the issue of higher rents and energy costs. “I now try to shop more cautiously,” she said, adding that the rising cost of living “should be a problem for the next government to solve.”

Faced with soaring inflation, Germany is not the only one Run It reached a 13-year high of 4.1% in the entire Eurozone.Prices rise faster In the U.SOctober increased by 6.3% year-on-year, the largest increase in 30 years.

Once people are vaccinated against Covid-19 and the lockdown is lifted, consumer and business activities will rebound, and the supply of many commodities from semiconductors to natural gas will have difficulty keeping up with demand, driving up prices.

The rebound in energy prices is an important factor in rising inflation.But global Supply bottleneck It also means that there are not enough parts (such as semiconductors) to produce all the goods people want to buy. This pushed up producer prices in German factories by 18.4% in the year to October—the highest level since 1951.

An extreme example is the way in which new cars are in short supply Price increased For the elderly. According to data from the leading sales website AutoScout24, in Germany, used car prices have risen by an average of 3,666 euros, or 18%, in the past year, reaching a record high of 24,502 euros in October.

“Prices are skyrocketing and our purchasing power is fading,” warned picture, The country’s best-selling tabloid last week. It advises readers to invest in real estate, stocks or precious metals to protect their funds from the “inflation lady”-this is a quote from the European Central Bank President Christina Lagarde.

The central bank’s recent negative interest rate policy and its policy of large-scale purchases of national debt have long been criticized for a long time. Legal challenge In Germany, opponents warn that this may cause inflation to run out of control. Now that prices are soaring, these criticisms are increasing.

German economist and former European Central Bank executive Otmar Issing wrote in the Frankfurt report last week that the bank assumes that inflation will fall next year and that it can continue to buy bonds and keep interest rates unchanged, thereby “exposing itself to high risk”. Low “Assume that employees will simply accept actual wage losses related to inflation.”

This frustration is a recent decision by Jens Weidmann Step down He became governor of the Bundesbank at the end of December, 6 years before the expiry of his term as governor of the central bank, and warn His employees “don’t ignore the potential risk of inflation.”

Many Germans keep their Savings In bank deposits, they pay almost no interest, and banks increasingly charge them. The pandemic will only exacerbate this trend, because since the beginning of the crisis in March 2020, German household deposits have increased by 214 billion euros to more than 2.6 billion euros.

But economists say that an important reason why Germans are anxious about rising prices is their conservative attitude towards currencies, which makes them more sensitive to declines in purchasing power.

Only about 15% of Germans invest directly in the stock market, compared to about 55% and 33% in the United States and the United Kingdom. In addition, less than half of German households own their own homes-compared to two-thirds in the United Kingdom or the United States, and eight-tenths in Italy. Therefore, although asset prices have been soaring, many Germans have missed the opportunity.

The country’s population is aging, with the population aged 80 or above increasing by 4.5% last year to 5.9 million, and it is also vulnerable to the corrosive effects of inflation on savings and pensions.

However, several factors indicate that German inflation will subside next year. First, the price rebound of the temporary sales tax cut last year will disappear from the inflation data in January.limit Announce Containing the record surge in coronavirus cases last week may also have a cooling effect on consumer spending and prices. German retail sales in September have fallen by 2.5% from the previous month.

In addition, the negotiated wages in the first six months of this year only increased by 1.5% over the same period last year. Isabel Schnabel, a German economist on the European Central Bank’s board of directors, said last week: “We have not seen any general wage pressures that could lead to spiraling wage prices.”

However, Jörg Krämer, chief economist at Commerzbank, predicts that German wages will rise by 2.5% next year, and pointed out that the parties that are negotiating to form a new Berlin government have pledged to raise the minimum wage by a quarter to reach 12 Euros per hour. “This will also force many companies to raise the wages of those close to the minimum wage,” he said.

Volker Wieland, a professor and government adviser at the Goethe University in Frankfurt, warned that if the inflation rate remains high, the political debate in Germany may heat up: “If we experience another 5% inflation rate, it will definitely become Germany. On the political stage, the Minister of Finance or the Minister of Finance said that it is difficult for the government not to respond to this.”