More companies planning price hikes in Germany, survey finds

BERLIN (Reuters) – Companies in Germany’s industrial, retail and corporate services sectors are planning more price increases, bringing inflation on track to rise to the European Central Bank’s 2% target, according to a survey published on Tuesday.

Ifo’s price expectations index grew to 15.9 in October from 14.1 points in September, the economic institute said.

“In the coming months, the inflation rate should pick up again somewhat and reach the European Central Bank’s 2% mark,” Ifo’s Sascha Moehrle said in a statement.

Retailers’ plans to increase prices play a notable role in inflation, with the indicator rising in that sector to 21.4 from 19.1 points, Ifo said.

Stubbornly high living costs in Europe’s largest economy have fuelled demands for higher pay. On Tuesday, a wave of strikes got under way staged by electrical engineers and metalworkers.

After dipping below the ECB target, German inflation is seen rising again to 2.1% in October according to analysts polled by Reuters, with preliminary data expected on Wednesday.