Germany's finance minister has warned that wage increases could further fuel inflation.

Inflation in Germany in April hit 7.8% year on year, the highest in more than 40 years, which is expected to spur wage demands.

Wage agreements for around 10 million workers in Germany will be renegotiated this year, according to the German Trade Union Confederation. Powerful union IG Metall raised eyebrows last month by demanding an 8.2% pay rise for more than 70,000 steelworkers.

The risk of rising prices due to wages is real, Finance Minister Christian Lindner told Reuters.

Companies and unions negotiating wage agreements have a big responsibility to prevent wage price spirals, he said.

Germany's ruling coalition in March agreed a second package of measures in months to give its people some relief from soaring electricity, heating and fuel prices.