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Germans face highest inflation rates in decades as energy prices rise

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By Philip Andrew Churm
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Germans face highest inflation rates in decades as energy prices rise
Copyright  Michael Probst/Copyright 2020 The Associated Press. All rights reserved

From energy and food, to paper and rent, prices have been rising in Germany and across Europe.

The latest data puts inflation in Europe's biggest economy at five percent year-on-year, the highest level in 30 years.

Simon and Lena Wendland are parents of newborn twins who say their lives have become more uncertain.

"We’re looking for our own place now and are seeing the high construction prices. It’s a little scary. We’ll probably end up with something more rural – the city is out of reach for us now," says Lena, who is a physical therapist.

Bild, the country's biggest-selling newspaper, blames the European Central Bank for failing to rein in prices and even adding to the problem with its cheap money policy.

Bild had nicknamed Lagarde's predecessor Mario Draghi "Draghila", comparing him to a vampire "sucking our accounts to the last drop".

Some recent reports branded ECB chief Christine Lagarde as "Madame Inflation", saying she "wears Chanel clothes" but "mocks the fate of pensioners, employees and savers".

But some analysts say the ECB has actually safeguarded the eurozone's prosperity with its policies.

Carsten Brzeski is an economist at ING. He says: "Right now inflation is mainly due to high energy prices, high raw material prices and the end of the lockdown, which has led to the prices in the hospitality sector and tourism going up a little."

After the devastation wrought by the crises of the 1920s and 1970s, Germans have an ingrained fear of inflation.

Average energy prices across Europe rose more than 17 percent in September alone.