Germany battles record inflation, rising prices

Inflation in Germany is causing a "dramatic social crisis" that could worsen in the coming months and requires permanent solutions, an economist warned on Wednesday. According to the Federal Statistical Office, annual consumer price inflation in June stood at 7.6%, slightly below the half-century high of 7.9% it reached the previous month.

Price jumps for energy and now also for food, stoked by the war in Ukraine, are fuelling inflation in Europe's largest economy. "We have not seen the end of the road in many respects, especially in terms of inflation and prices, which are hitting people on low incomes very, very hard", Marcel Fratzscher, the president of the German Institute of Economic Research (DIW), said on Wednesday.

He called for further relief for low-wage earners and said the government has to come up with new, effective and long-lasting measures immediately. "It should be targeted, to reach the people who really need help," Fratzscher said, predicting that prices would never return to pre-crisis levels.

"This means that all measures must be based on whether they permanently increase people's incomes. And the only mechanism for this is permanently higher wages and permanently higher social benefits for the people who have no work or are pensioners," he said.

At a food bank in Duesseldorf, volunteers are seeing increasing numbers of residents asking for help, including those who already benefit from social security.