The Economist May 10th 2022 |Baked in| Finance & economics| “Even outside America, inflation is starting to look entrenched” “Five indicators suggest Anglophone countries are suffering the most”
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Summary by 2244
Chart from trading economics.com
Data Present in Charts
% Change on a year earlier “Core consumer prices, Q1 2022” (See the article for definitions)
Ranked High to Low
America ~6.2%
Britain ~4.3%
Canada ~4.1%
Australia ~3.9%
Germany ~3%
South Korea ~2.5%
Spain ~2.2%
France ~1.9%
Italy ~1.5%
Japan ~ Negative 2%
“The Economist’s inflation entrenchment score May 2022. (See article for definitions)
Canada ~87%
America ~85%
Britain ~75%
Germany ~63%
Australia ~58%
France ~57%
Spain ~42%
South Korea ~39%
Italy ~23%
Japan ~12%
“Consumers expectations of inflation over the next 12 months, April 2022, %”
Canada ~5.8%
America ~5.2%
Spain ~ 5.4%
France ~ 5.0%
Australia ~4.8%
Britain 4%
Italy ~3.5%
South Korea ~1.9%
Japan ~ 1%
“Google search volume for ‘inflation Feb-May 20-22 average, peak=100”
Canada ~42
American ~39
Britain ~35
Germany ~ 46
Australia ~28
France ~59
Spain ~23
South Korea ~17
Italy ~17
Japan ~15
Summary Notes
There’s been plenty of news stories and discussions about inflation in America, but the data displayed above shows inflation and the anticipation inflation going forward is widespread and “becoming baked into everyday life in other parts of the world.” Specifically “it is entwining [the] Anglophone economies.” Canada is worse off than America and “Britain has a big problem on its hands.”
Why is this happening?
Stimulus payments, to help cope with the COVID pandemic, have had the impact to stimulate demand and consequently put pressure on prices. These payments were less in Japan and the euro area as they previously had “ultra-loose” monetary policy. Britain, having had Brexit, found that losing “your largest trading partner can cause costs to rise.” Wages are rising “far faster than their long-run average in many countries” and this can push prices higher as well.