What is an example of cost-push inflation?



What is an example of cost-push inflation?

This may be due to natural disasters, or increased prices of inputs. For example, a sudden decrease in the supply of oil, leading to increased oil prices, can cause cost-push inflation. Producers for whom oil is a part of their costs could then pass this on to consumers in the form of increased prices.

What do you mean by inflation?

Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. Note here the term general price level i.e. increase in price of only 1 or 2 commodities is not inflation but increase in prices of a basket of goods and services.

What are the biggest drivers of inflation in the UK?

Energy bills are one of the biggest contributors to inflation at present, as oil and gas prices remain at elevated levels in part due to the Ukraine war. After a rise in the UK’s energy price cap in April, average gas and electricity prices jumped by 53.5% and 95.5% respectively compared with a year ago.

What is consumer price inflation?

This is described in Section 4, with links to more detailed articles on the subject. Consumer price inflation is the rate at which the prices of goods and services bought by households rise or fall. A convenient way of thinking about this is to imagine a very large “shopping basket” containing those goods and services bought by households.