The findings come as support for Chancellor Olaf Scholz and his coalition slumps and the AfD capitalises on voter insecurity. German inflation has been on a downward trend, but is still much higher than the European Union's 2% target. Low and middle income households have been generally hit harder by inflation, Florian Dorn, a researcher at Ifo told Reuters. Although higher energy import prices initially drove inflation in Europe and Germany, companies were also putting up prices beyond their cost inflation, WSI analysis showed. Companies' profit inflation rose by 7% in 2022 compared to an only 3.3% rise in labour costs.

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Persons: Fabian Bimmer, Chancellor Olaf Scholz, Florian Dorn, Ulrich Schneider, Der, Riham, Alexandra Hudson Organizations: REUTERS, Kantar Public, Ifo, Reuters, Workers, Companies, Alexandra Hudson Our, Thomson Locations: Hamburg, Germany, Russia, Ukraine, Europe's, Europe