Perhaps, thinking back to the energy shock of fifty years ago, one can venture to say that inflation, if not always and everywhere a ‘monetary phenomenon’ in a causal sense, is generally a ‘money-enabled phenomenon’. The touch paper for this was (in Europe) energy and commodity prices; that said, the fuel is there, and it must not catch fire.
However, this impact is likely to be waning. On the counterpart side, the annual growth of loans to non-financial corporations continued to edge up, from 0.9% in May to 1.5% in June, whereas the annual growth of loans to households hovered over recent months around rates of slightly above 3%. The overall size of MFI balance sheets has remained broadly unchanged over recent months.