German consumer sentiment unexpectedly fell to its lowest level in five months going into April, partly due to people's concerns that rising inflation will erode their purchasing power. Sonia Legg reports.
The nation of savers had just started spending - then inflation took a turn. It's made German consumers nervous - sentiment, according to GfK, was below 10 points and at its lowest level in five months. (SOUNDBITE) (German) GFK RESEARCHER, ROLF BUERKL, SAYING: "Income expectations are very much affected by inflation. We saw an inflation rate of 2.2 percent for Germany in February which is a relatively high figure. This impairs purchasing power and consumers act accordingly. Worse still is the fact that there is still a zero percent interest rate policy in Germany, that's bad news for savers." But it wasn't an entirely negative picture. A 10 per cent fall in crude oil prices in the first half of March looks set to take inflation back below 2 percent. With a robust jobs market Germans also remain ready to spend And even Trump's economic policies were less of a concern. (SOUNDBITE) (English) CRAIG ERLAM, SENIOR MARKETS ANALYST, OANDA, SAYING: "I think the consumer is less important to the German economy, than say the US or UK economy. I don't think any slight dip in consumer sentiment is going to have any major impact." Neither will their current account surplus, at least that's what the Germans say. The finance ministry's monthly report says it will be eaten up in time by an ageing population. It also had a message for Donald Trump, who thinks the surplus is too high. Don't blame us for being good at what we do.