Who gets squeezed by inflation?

What’s new?

ith price inflation at multi-decade highs in the UK – as well as in other big economies, including the US and Germany – the issue has shot to the top of the policy agenda. Central bankers are under attack for having lost control and politicians for the cost of living crisis. There’s a debate over whether the inflationary surge is transitory (caused by the unexpectedly strong post-pandemic bounceback and constrained supply), or something more permanent. The stakes are high, says Chris Giles in the Financial Times. If policymakers wrongly judge that high inflation has become entrenched, they