According to the latest Opinion Survey on the General Public’s Views and Behavior the Bank conducts on households, about 80 percent of respondents who have felt that prices “have gone up” have described the price rise as “rather unfavorable.” This is not surprising. If asked only about prices, respondents will respond on the assumption that other conditions, including wages, are unchanged.
On both sides of the Atlantic and globally – and last week in the IMF annual meetings – one is bound to witness an intensive debate on “back to the 70s stagflation”, and whether the recent rise in consumer price inflation is of transitory or permanent nature. Let me give you my take on this.