What is behind current inflation spikes? - a podcast by European Central Bank

What is causing the rise in inflation we are seeing at the moment? And which trends could have an impact on prices in the future?

In this episode of The ECB Podcast, our host Katie Ranger looks for answers to these questions in the discussions held at the 2021 ECB Forum on Central Banking.

The views expressed are those of the speakers and not necessarily those of the European Central Bank.

Published on 6 October 2021 and recorded on 4 October 2021.

In this episode:
01:32 – The economic recovery after the pandemic
How the world economy is doing after the slump in economic activity caused by the coronavirus pandemic and how this is affecting prices.

03:11 – Why has inflation been persistently low over the last ten years?
Different factors have contributed to low inflation, including more people entering the job market, slower wage growth and a reluctance to put up prices.

4:32 – Reasons behind the recent inflation spikes
The rise in inflation is linked to the reopening of the economy, where pent-up demand is meeting supply bottlenecks, and to base effects. These temporary factors are not expected to last.

9:29 – Trends that could impact inflation in the future
Trends are emerging that could affect prices in the future. These include changes in the demand for services after the pandemic and the effects of digitalisation on globalisation. The green transition may also impact inflation in coming years.

Further reading

Speech by Christine Lagarde: Monetary policy during an atypical recovery, 28 September 2021
https://www.ecb.europa.eu/press/key/date/2021/html/ecb.sp210928~4cc57f558d.en.html

Post on The ECB Blog by Isabel Schnabel: The spectre of inflation, 14 September 2021
https://www.ecb.europa.eu/press/blog/date/2021/html/ecb.blog210914~a514f7c553.en.html

Speech by Isabel Schnabel: New narratives on monetary policy – the spectre of inflation, 13 September 2021
https://www.ecb.europa.eu/press/key/date/2021/html/ecb.sp210913~031462fe79.en.html

Christine Lagarde: Monetary policy statement – ECB press conference, 9 September 2021
https://www.ecb.europa.eu/press/pressconf/2021/html/ecb.is210909~b2d882f724.en.html

ECB Forum on Central Banking: Policy panel – YouTube recording, 29 September 2021
https://www.youtube.com/watch?v=QvIFhzLOuCg

ECB Forum on Central Banking: The future of inflation – YouTube recording, 28 September 2021
https://www.youtube.com/watch?v=w6KQi2tnmIM

The ECB Podcast: Inflation: on porridge, prices and the new normal, 31 October 2019
https://www.ecb.europa.eu/press/tvservices/podcast/html/ecb.pod191031_episode2.en.html

European Central Bank website
https://www.ecb.europa.eu/

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