Supermarkets See Superinflation in 2022
Inflation is on the rise all around the world. In the United States, the inflation rate hit 7.5% in January, the fastest pace in 40 years, but other major economies are suffering similar problems. U.K. inflation rose to 5.5% in January and is expected to reach 8% in the Spring. In the Eurozone, inflation stands above 5%—higher than at any time since the launch of the single currency. On the other side of the globe, prices are increasing more rapidly in both Australia and New Zealand.
Policymakers are hopeful some of this inflation will prove to be short-lived. They believe this bout is partly explained by disruption from the COVID-19 pandemic, with the world now struggling to cope with a surge in demand following the reopening of so many economies. That is driving the price of raw materials and energy higher. Logistics costs add to the pressure, with the world’s shipping and freight companies also trying to re-orient themselves in the wake of the pandemic.
However, not all economists are convinced by these arguments—and central banks such as the Bank of England are already conceding that inflation may last longer than initially expected. The war in Ukraine has the potential …