Inflation
The general rise in prices that makes your money lose purchasing power over time.
In short
As of 5 October 2026Inflation is the general rise in prices that makes your money lose purchasing power over time. In Germany, it is measured with the consumer price index, and the European Central Bank aims for 2 percent a year over the medium term. At 2 percent inflation, shopping costing 100 euros today costs about 122 euros in ten years.
Inflation means that the same euro buys less over time. In Germany it is measured by the consumer price index. The European Central Bank aims for inflation of 2 % per year over the medium term.
Example: at 2 % inflation, shopping that costs 100 euros today costs about 122 euros after ten years. Money left on a current account without interest loses roughly a fifth of its purchasing power over that time.
That's why the real return matters: return minus inflation. If an investment earns 3 % with 2 % inflation, your purchasing power grows by only about 1 %.
Sources
As of 5 October 2026 · Educational content, not investment or tax advice.