Expensive butter, expensive bread, expensive petrol - and with the ancillary costs probably an additional payment of two months' rent.
People in Germany are currently feeling concretely how inflation of currently almost 9 percent feels.
But how will companies react now that the price explosion for raw materials and intermediate products is threatening to ruin their annual profits?
Our colleague Christian Schütte spoke to the world-renowned price strategist
Hermann Simon
about how company bosses now have to react to inflation.
Simon's Advice: Businesses need to get ahead of the cost wave as soon as possible.
If you wait 3 months now, you risk destroying the targeted annual result.
This means that companies have to raise prices early on to absorb the rise in costs.
Bosses have to activate all areas in order to master the problem: Purchasing has to secure the supply and find price compromises, production has to recalculate, sales have to push through higher prices.
"To make matters worse, nobody has practical experience with this problem," says Simon.
"The last major phase of inflation was 50 years ago."
Many are still hoping that the cost shocks will soon subside.
When new chip factories are built, the global supply chains are functioning again and gas and oil prices normalize, there may be some relief on the price front.
But, warns Simon: The global money supply has inflated greatly as a result of the policy of the central banks - and can only be slowly reduced again.
"Too much money is chasing too few goods," is the conclusion of the price strategist.
He estimates: "Inflation will be with us for at least another ten years."
The business news of the day:
EU countries agree on gas emergency plan:
Russia has again severely throttled gas supplies through the Nord Stream 1 pipeline.
The EU is preparing an emergency plan for the day when Russia's President Putin turns off the faucet completely.
From the beginning of August to the end of March, the EU countries should voluntarily reduce their gas consumption by 15 percent, according to the plan.
Should gas become very scarce in some EU countries, the EU should also have the option of giving the countries binding savings targets.
IMF lowers its growth forecast:
The global economy will grow more slowly than expected due to the war in Ukraine and persistently high inflation.
This is the result of the new forecast by the International Monetary Fund.
Global growth will only amount to 3.2 percent this year, 0.4 percentage points less than assumed in April.
The IMF expects growth in the euro zone to be 0.2 percentage points lower at 2.6 percent.
Lufthansa is canceling almost all flights on Wednesday:
The chaos at German airports will intensify again tomorrow, Wednesday.
The strike by Lufthansa ground staff means that Deutsche Lufthansa has canceled more than 1000 flights for the day.
Connections to the USA are also affected.
Porsche investors are unsettled:
Porsche boss Oliver Blume is also to lead the entire VW group from September.
Blume can only manage the planned IPO of Porsche AG as a part-time manager.
Blume's double burden angers many Porsche investors: According to a survey by the Bernstein investment house, more than 40 percent of professional investors were in favor of postponing the IPO of the VW subsidiary Porsche for the time being.
What else kept us busy:
Coinbase and the crypto crash:
The fall in the price of cryptocurrencies such as Bitcoin, Ether and Co has also hit the world's largest crypto
exchange Coinbase
hard.
Now Coinbase founder Brian Armstrong is looking for renewed investor confidence and new business.
The crypto frenzy is over, the workforce is decimated, the share price is down: and yet Armstrong sees himself well on his way to becoming the apostle of a new, serious crypto age.
Our colleague Hannah Steinharter describes how Coinbase wants to get through the crypto winter.
My recommendation for the evening:
Delay in the rail reform:
Transport Minister
Volker Wissing
(FDP) wanted to radically clean up at
Deutsche Bahn
and make the restructuring of the group a top priority.
But so far it looks like the hapless Bahn boss
Richard Lutz
will thwart Wissing's plans and stay in control of what's happening, as our colleague Michael Machatschke analyses.
First of all, Lutz prevailed against Wissing in an important personal matter:
Lutz pressed his confidante
Berthold Huber as the successor to the departed
Bahn board member Ronald Pofalla
through – with the help of the trade union and the SPD.
And strategically, Lutz is now the winner: instead of implementing reforms, he gets away with simple rhetoric - such as the tepid promise to "fundamentally upgrade the ailing rail network from 2024".
A railway reform will come with a delay, if at all.
Cordially, your Kai Lange
