However, individual services, too, might see bouts of stronger demand for a restricted supply once the consumption backlog clears. How much consumption, when and for which goods exactly households intend to catch up on remains to be seen. And nor is it by any means certain that enterprises will then capitalise on any scope to raise their prices.
Either way, catch-up effects would probably not drive up inflation for good. For inflation to become persistently too high, it would be crucial for second round effects – in the form of much stronger wage growth or noticeably higher inflation expectations – to be at play. There are currently no signs of this, however.