The war in Ukraine and high prices are pushing consumer sentiment in Germany to a record low.

As a result, private consumption, which is an important pillar for the recovery of the economy, is threatening to fail for the time being.

The barometer of the Nuremberg GfK market researchers signals a slump for May and falls by 10.8 points to minus 26.5 points, as GfK announced on Wednesday.

This was well below the record low of the Corona lockdown in spring 2020.

GfK specialist Rolf Bürkl spoke of a "heavy blow" for consumers, whose purchasing power was melting away due to high inflation.

"Increased prices of everyday goods are putting constant pressure on wallets," emphasized chief economist Alexander Krüger from Hauck Aufhäuser Lampe Privatbank.

"For consumption, things are already looking very bleak for the current quarter."

According to Bürkl, a noticeable increase in the propensity to save in April accelerated the collapse in consumer sentiment.

"The hopes of a recovery as a result of the easing of restrictions caused by the pandemic have finally been dashed." In addition to the general uncertainty, the 7.3 percent highest inflation since the end of 1981 is dampening the mood for consumption.

"If significantly more has to be spent on petrol, heating oil and gas, there are correspondingly fewer financial resources for other purchases," explained Bürkl.

The risk for the economy has also increased further from the consumers' point of view, who assess the danger of a recession as high.

In the most recent survey by the Ifo Institute among business executives, their mood had at least stabilized somewhat after the Ukraine shock.

Change of mood only at the end of the war

"Consumers are kneeling before the immense inflation," summarized DekaBank economist Andreas Scheuerle.

Consumption is currently still going well after the corona easing.

"But based on consumer sentiment, that could change soon." The federal government expects inflation to average 6.1 (2021: 3.1) percent in 2022, as Reuters recently reported.

Economics Minister Robert Habeck (Greens) will present the new forecast in the afternoon.

According to the GfK expert, there can only be a lasting change in mood among consumers if the war in Ukraine leads to successful peace negotiations.

The explosive rise in energy prices in the wake of the conflict at the gates of the EU has caused consumers' prospects for their own finances to slip.

In April, income expectations fell to their lowest level since February 2003. The barometer for willingness to make larger purchases - the propensity to buy - fell to its lowest level since the financial and economic crisis in October 2008.

DGB boss calls for inflation compensation

The enormously high inflation fuels the concern among experts of a wage-price spiral - that is, that wages and prices are mutually increasing.

DGB boss Reiner Hoffmann is pushing for significant wage increases in the current year because of the price hike.

"Compensation for inflation, employees' participation in productivity gains and fairer distribution remain the main goals of our collective bargaining policy," said Hoffmann of the "Rheinische Post".

IG Metall, for example, is demanding 8.2 percent more wages for employees in the steel industry in the coming wage round.

In France, the consumer climate also clouded over in April.

According to the Insee statistics office, the barometer slipped to 88 points from 90 points.

A similarly low level was last seen in the Corona lockdown in 2020. Economists had even expected a slight plus for April.