Workers have the most to lose from a wage-price spiral
As prices rise, real wages are falling
THE WORLD economy keeps producing nasty inflation surprises. In January consumer prices grew by more than expected in America, Britain and the euro zone, and America’s rate of annual producer-price inflation stayed close to 10%. Making matters worse, fears that Russia would invade Ukraine sent the oil price to over $96 a barrel on February 14th, its highest since 2014. On both sides of the Atlantic financial markets have rapidly priced in more monetary tightening in 2022, as some central bankers have begun to worry in public that they face a test of their credibility.
This article appeared in the Leaders section of the print edition under the headline “The chicken and the peg”
Leaders February 19th 2022
From the February 19th 2022 edition
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