WaPo: Prices are rising all over the world, and leaders see no quick fix
It probably isn’t much consolation for Americans struggling with the highest inflation in 40 years, but they are not alone.
In the European Union, prices are rising faster than at any time since the euro currency was introduced. The annual inflation rate in the United Kingdom hit 5.4 percent in December, the highest figure there in nearly 30 years. Canada’s consumer prices are rising twice as fast as before the pandemic.
Even in Japan, where prices have been depressed almost continuously since the collapse of the late 1980s real estate bubble, the central bank in recent days revised upward its assessment of inflation risks for the first time in eight years. Among major economies, only China has a lower inflation rate today than in early 2020.
Around the world, soaring prices are emerging as a feature of the post-pandemic recovery, prompting some central banks to pivot to inflation fighting.
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“Part of what we’re seeing in the U.S. is very similar to, and echoed in, the rest of the world,” said Nathan Sheets, global chief economist for Citigroup. “And part of it is unique to our circumstances and particularly to the strength of U.S. aggregate demand.”
Snarled global supply chains, afflicting ports in Rotterdam and Shanghai as well as in Los Angeles, are driving up costs around the world. Increasing commodities costs, including food and energy, are doing likewise.
Over the past year, global oil prices are up more than 55 percent. Nickel, used in automotive and aerospace plants, is up 27 percent. And coffee has almost doubled in price.
Those bills are hitting customers everywhere, including in the United States. Over the past year, prices of imports — especially food, fuel and industrial parts — have risen by more than 10 percent, according to the Bureau of Labor Statistics. That was the largest one-year increase since 2007.
In response, major U.S. companies are hiking retail prices. Procter & Gamble, maker of Tide laundry detergent and Bounty paper towels, told investors last week that higher commodity costs represented a $2.3 billion annual head wind while freight costs were up $300 million. The company said it had raised prices in all 10 of its product categories, boosting profits.
https://www.washingtonpost.com/business/2022/01/23/inflation-global-prices-biden/
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