… refers to the ongoing one in economic terms process of currency devaluation, which is reflected in general price increases. Less can then be bought with the disposable income. It is said that purchasing power is falling. Another word for inflation is cost of living.
One-off, temporary price increases caused by unusual events or those that only affect certain goods are not considered inflation.
Inflation is measured by the increase in a price index that best reflects the general price level. In Germany this is the consumer price indexwhich calculates increasing prices using a basket of 650 items that is continuously adjusted.
