Originally written by Andrew Backhouse, 11th March 2022
Inflation is surging in the United States, hitting the highest level in 40 years and pushing up the prices of food and petrol.
Inflation is soaring in the United States, with the Consumer Price Index rising 7.9 per cent — the highest amount in 40 years.
The Labor Department confirmed prices for petrol, food and houses and jumped sharply, up 7.9 per cent in February — compared to the same month last year.
Governor of Florida Ron DeSantis said energy prices were “skyrocketing”, fuelling price increases throughout the economy.
In response, the US Federal Reserve is expected to increase interest rates next week, for the first time since the pandemic began.
But analysts are warning of another shock to come from the sanctions imposed on Russia, a major producer of oil and gas.
“The Russia-Ukraine war adds further fuel to the blazing rate of inflation via higher energy, food and core commodity prices that are turbo charged by a worsening in supply chain problems,” Kathy Bostjancic of Oxford Economics said.
Eric Winograd, senior economist at asset management firm AllianceBernstein said, “The numbers are eye-watering, and there is more to come.”
He warned the peak in inflation would be much higher than previously thought and would arrive later than previously expected.
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