Consumer prices in Germany were up sharply at the start of the year, partly because households’ consumption behaviour has changed in certain areas during the coronavirus pandemic, as shown by an analysis in the current issue of the Monthly Report.

The economic recovery in Germany was brought to a standstill in the final quarter of 2020, the Bundesbank writes in its latest Monthly Report, stating that this was due to resurgent infection rates and the tightening of containment measures. Economic activity was consequently still almost 4% down on the pre-crisis level of the fourth quarter of 2019.

According to Bundesbank Executive Board member Burkhard Balz, the digital economy will change the payment landscape quite significantly. Therefore, it is the responsibility of the cen-tral bank to create trust in its currency and to ensure that payments remain competitive and safe. “We also have to ensure that central bank money will be offered in a way that is compatible with the digital economy,” he said in a speech.

Bundesbank Executive Board member Joachim Wuermeling believes that Brexit will radically change Germany’s banking market and that Frankfurt in particular is well placed to reap the rewards. “Frankfurt has the potential to become the EU’s anchor financial centre, but a raft of additional steps still need to be taken in order for this to happen,” he tells Germany’s “Handelsblatt” newspaper.