Thought for the Week: Inflation Drivers

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Gavin Oldham

Thought for the Week: Inflation Drivers

Gavin Oldham
Original Broadcast:

Thought for the Week

Thought for the Week: Inflation Drivers
The range of major drivers which will steer inflation over the years ahead is wide and diverse, but their duration must be considered as well as their positive or negative impact on rates. For example, the drivers most affected by Putin's war in Ukraine are energy shortages and supply chain disruption, and the threat of de-globalisation in future. These all contribute to higher inflation but it is only a more cautionary approach leading towards de-globalisation which will persist. Meanwhile technology, demographics and a swifter transition to low cost alternative energy will all bear down on price rises. In this commentary we take a look at nine major influences on future rates of inflation, and conclude that central bankers are right to be cautious about chasing after inflation with their interest rate policy.

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Topics: Macro-Economics (in Economics)


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