Inflation, across the globe, continues to surge. The latest figures from the US show CPI rising by 6.2% over the last year. It rose by 0.9%, month on month, against September alone. The rise in September was 0.4%, showing that, contrary to claims that inflation is just “transitory”, or explained mostly by base effects, i.e. comparison with figures for last year, when lock downs had reduced demand and prices, the rate of increase in inflation is increasing not diminishing. In Britain, the CPI figure came in at 4.2% over a year ago, compared with just 3.1% for the previous month. Again, the month on month rise was a whopping 1.1%, compared to just 0.3% in the previous month. That is the highest level since 2011, but things are worse than that. Measured in terms of RPI, inflation came in at 6%, which is the highest level since 1991. Real levels of inflation are much higher still, which shows why we need a workers' cost of living index, calculated by committees of workers, trades unionists, and labour movement economists.
Taking the month on month figures, and projecting forward a year, would give US inflation of around 11% this time next year, and for the UK of around 13.5%. But, even taking the average for the last 3 months, and projecting forward a year, gives a figure of around 8.5%, for the UK, and 6.5% for the US. Increasingly, no one thinks that the supposedly “transitory” inflation is going to end before then, and, now, rising prices, over the last few months, begin to get embedded into higher costs of goods and services, in the period ahead, including in wages, in conditions where widespread labour shortages are already pushing up wages by significant amounts. Firms will all attempt to pass on those higher costs for inputs and wages into their own prices, and, with current conditions of sharply rising demand, shortages, and central banks still providing the liquidity required to enable those higher prices, a continuation of inflation in the year ahead is inevitable.
In fact, the three month average for inflation has been depressed, because of the re-imposition of various restrictions on activity, under cover of rising COVID infection rates, even though the number of serious illnesses, hospitalisations and deaths of people even just WITH COVID has fallen dramatically, as a result of widespread vaccination, and the development of herd immunity. It is becoming clear that COVID is being used as justification for these restrictions, which act as a proxy for austerity measures, which governments dare not impose, as a means of slowing an economic expansion that has already led to rising interest rates, which, as they rise, will cause asset price to crash.
The figures for deaths related to COVID continue to be massively overstated by the media, because they continue to present the figures of people who have died WITH Covid, as though it represents the number of people who have died FROM Covid. The actual deaths FROM COVID are only about a tenth of the figure of those that have died WITH Covid ( See also: More COVID Data Analysis), and the reason numbers are rising, even to relatively low levels, now, is down to the onset again of Winter, when deaths, particularly of the elderly and infirm, always rise. However, given the protection from death, or serious illness, from COVID, provided by vaccination, vaccinations that were never claimed to prevent infection, the number of people dying from all the usual causes, of Alzheimer's, dementia, heart disease, stroke and so on, will, inevitably, rise, as it always does at this time of year, and many of them will indicate, also, infection with COVID, but few of them that have been vaccinated will be seriously ill with it, let alone die from it.
Those restrictions have acted to moderate the strength of the recovery, as well as also placing obstacles in the path of workers returning to work, which would have, itself, given a further stimulus to demand. Despite all that, employment levels have continued to rise sharply, and demand is also rising sharply. One account suggests that Britons are set to spend around £85 billion in the run up to Christmas.
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