Fall in German retail sales might help combat inflation

in inflation •  2 years ago 

The usual way to combat inflation is to force people to spend less, either by raising interest rates or raising tax. Producers and retailers are then forced to streamline, automate and cut expenses, so that they can reduce prices and tempt people to buy again.

In the EU, the buyers strike is most advanced in Germany, where retail sales fell by 1.6% in June compared with May:


source

Of course there will be much gnashing of teeth from retailers - but the pain should spur them to find ways to cut prices.

There is no painless way to bring down inflation.

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