The risk of inflation is increasing significantly, warns a European economist as Germany records its largest inflation surge in 28 years.
Thomas Gitzel, chief economist at VP Bank, warned: “The risks of inflation are currently increasing significantly.
“So far, it has been safe to say that the rise in inflation is temporary.
“But the now significantly higher raw material prices are changing the starting position.”
Imported goods rose by almost 17 percent – as much as they did during the second oil crisis in 1981.
Over the years, natural gas imports rose by 178 percent, with electricity rising by 136 percent year-on-year.
Coal and iron ore have also seen the price of imports rise by 118 and 97 percent respectively.
Mr Gitzel warned the higher gas prices could have an impact on electricity prices.
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