Inflation is likely to remain high for another two years as companies pass on higher input costs and in some cases exaggerate them, the head of the council of economists that advises the German government was quoted as saying on Saturday.
Russia's invasion of Ukraine has further stoked already rising costs for food and energy, pushing inflation in Germany to its fastest pace since the early 1950s, with consumer price rises ofThe Bundesbank has warned that even a planned price cap on gas and electricity may not be enough to bring inflation down from double digits.
"Inflation is remaining high because we are seeing second round effects, with companies passing on their higher costs - and some significantly exaggerating." Workers in those industries agreed to what will likely prove to be below-inflation pay increases in return for one-off compensation payments.
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