Source: Reuters · Link
As economics students, we’re often taught about the dangers of cost-push inflation and how it can trigger something known as stagflation — when prices rise while growth slows. This article on UK food prices makes that theory come alive. It’s interesting to see how higher production costs — from energy, transport, and supply chain pressures — are pushing prices upward across supermarkets. This isn’t about consumers demanding more; it’s about firms facing higher costs and passing them on. This right here is a text book example of cost push inflation, and we can now see how it slows overall spending, squeezes real incomes, and makes policy decisions more complex. Reading this made me realise that what we study as a “dangerous theoretical scenario” — stagflation — can actually unfold in developed economies like the UK today.