Blog: November 2021

Macchiarelli, C's picture

Dr Corrado Macchiarelli

Sánchez Juanino, P's picture

Patricia Sánchez Juanino

Naisbitt, B's picture

Barry Naisbitt

Posted: 19 November, 2021 - 10:49

In October 2021, the US 12-month CPI inflation rate reached its highest level in the US since 1990, 6.2 per cent year-on-year. Pent-up demand and higher energy prices have been a major factor in the increase but supply chain shortages and increases in other commodity prices also explain more recent increases (see Sanchez Juanino, Macchiarelli and Naisbitt, 2021). A key question of policy debate is whether the increase in US inflation will be just temporary, as in 2008, the start of a prolonged period of inflation above the 2 per cent target, or worse still whether inflation will continue to escalate as it did in the 1970s and early 1980s.

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Prof Huw Dixon

Posted: 17 November, 2021 - 16:16

CPI Inflation rose to 4.2% from the previous months 3.1%, slightly higher than we had expected. The anticipated twin effects of the increase in the OFGEM price cap and an increase in the VAT rate on hospitality (partially reversing the July 2020 reduction) both impacted the figure as did surging petrol and diesel prices. Since there was a base effect of 0% dropping out from September 2020, all the change in headline inflation in October arises  from the new inflation in the month September to October 2021 which represents the largest month on month increase since April 1993.