Connect with us


‘The worst is yet to come’: the curse of high inflation

News Agencies



By Mark John

(Reuters) – Globally, people are experiencing inflation at levels not seen for decades as prices surge for essentials like food, heating, transport and accommodation. And though a peak could be in sight, the effects may yet get worse.

How did we get here? In two words: pandemic and war.

A long and comfortable period of scant inflation and low interest rates ended abruptly after COVID-19 struck, as governments and central banks kept locked-down businesses and households afloat with trillions of dollars of support.


That lifeline kept workers from joining dole queues, businesses from going broke and house prices from crashing. But it also knocked supply and demand out of kilter as never before.

By 2021, as lockdowns ended and the global economy grew at its fastest post-recession pace in 80 years, all that stimulus money overwhelmed the world’s trading system.

Factories that had been idled could not ratchet up fast enough to meet demand, COVID-safe rules caused labour shortages in retail, transport and healthcare, and the recovery boom caused a spike in energy prices.


If that wasn’t enough, Russia invaded Ukraine in February and Western sanctions on the major oil and gas exporter sent fuel prices yet higher.


Known as a “tax on the poor” because it hits those on low incomes the hardest, double-digit inflation has exacerbated inequalities worldwide. While wealthier consumers can rely on savings built up during pandemic lockdowns, others struggle to make ends meet and a growing number rely on food banks.


With winter setting in across the northern hemisphere, that squeeze on living costs will tighten as fuel bills soar. Workers have taken strike action in sectors from healthcare to aviation to demand that wages keep pace with inflation. In most cases, they are having to settle for less.

Cost of living concerns dominate the politics of rich nations – in some cases relegating other priorities, such as climate change action.


While recent falls in gasoline prices have eased some of the pressure, inflation remains a top focus for U.S. President Joe Biden’s administration. France’s Emmanuel Macron and Germany’s Olaf Scholz are stretching their budgets to channel billions of euros into support programmes.

But if things are tough in industrialised economies, rocketing food prices are worsening poverty and suffering in poorer countries, from Haiti to Sudan and Lebanon to Sri Lanka.

The World Food Programme estimates an extra 70 million people worldwide have been driven closer to starvation since the start of the Ukraine war in what it calls a “tsunami of hunger”.



The world’s central banks have embarked on steep interest rate hikes to cool demand and tame inflation. By the end of 2023, the International Monetary Fund expects global inflation to have fallen to 4.7% – just less than half its current level.

The aim is for a “soft landing” in which the cooling-off happens without housing market crashes, business bankruptcies or surging joblessness. But such a best-case scenario has proven elusive in past encounters with high inflation.


From U.S. Federal Reserve chief Jerome Powell to the European Central Bank’s Christine Lagarde, there is growing talk that rate-hike medicine may taste bitter. On top of that, risks surrounding the big uncertainties – the Ukraine war, tensions between China and the West – are skewed to the downside.

The IMF’s regular October outlook was one of the bleakest for years, stating: “In short, the worst is yet to come and for many people, 2023 will feel like a recession.”

Explore the Reuters round-up of news stories that dominated the year, and the outlook for 2023.


(Editing by Catherine Evans)

Continue Reading


Breaking News

Editor Pick’s

Latest Entertainment

Entertainment41 mins ago

Kate Moss casts Willow star Ellie Bamber to play her in Moss & Freud biopic

Kate Moss; Ellie Bamber Dave Benett/Getty Images; Alberto E. Rodriguez/Getty Images Kate Moss has tapped ‘Willow’ actress Ellie Bamber to...

Entertainment1 hour ago

Serena Williams addresses Will Smith Oscars slap scandal nearly 1 year later: ‘We’re all human’

Serena Williams hadn’t spoken out about Will Smith slapping Chris Rock at the 2022 Oscars until now. (Photo by Kevin...

Entertainment2 hours ago

‘Groundhog Day’ at 30: Andie MacDowell reveals Bill Murray’s on-set shenanigans

Life imitated art for Andie Macdowell on the set of Groundhog Day, which was released 30 years ago, on Feb....

Entertainment2 hours ago

‘Groundhog Day’: Andie MacDowell reveals Bill Murray’s on-set shenanigans

Life imitated art for Andie Macdowell on the set of the 1993 comedy classic Groundhog Day. Just as her Pittsburgh...

Entertainment2 hours ago

Sylvester Stallone’s Reality Show The Family Stallone to Premiere This Spring — See the Promo!

Sylvester Stallone is gearing up to share a whole new side of himself. On Thursday, Paramount+ announced that the new eight-part...

Entertainment14 hours ago

Bachelor Alum Sarah Herron Shares Her Baby Died After She Gave Birth at 24 Weeks Pregnant

Sarah Herron is mourning the loss of her newborn son, Oliver Brown. The Bachelor alum shared on Feb. 1 that...

Entertainment15 hours ago

Clayton Echard and Rachel Recchia Poke Fun at ‘Reality TV Trauma’ as They Reunite Beside Bachelor Pals

Clayton Echard and Rachel Recchia Clayton Echard/instagram Clayton Echard, Rachel Recchia and the rest of their reality show...

Entertainment18 hours ago

Who is Navarone Garcia? The half-brother of Lisa Marie Presley gives rare interview about his famous family.

Navarone Garcia, the half-brother of Lisa Marie Presley, gives a rare interview about his famous family. He and his sister...


Latest Sports

Sports53 mins ago

Giants’ Julian Love takes a shot at Eagles head coach Nick Sirianni

The Eagles steamrolled the Giants in the divisional round of the NFL postseason, and it sounds like Giants safety Julian...

Sports1 hour ago

Ohio State OT Dawand Jones ‘makes other OL look small’ at 2023 Senior Bowl practices

Dawand Jones seems to be taking advantage of his first opportunity to boost his NFL draft stock.

Sports2 hours ago

Who are the Premier League’s winners and losers after transfer window closes?

A look at how some of the top-flight teams tackled the January sales.

Sports2 hours ago

Super Bowl 2023: Chiefs vs. Eagles position-by-position breakdown. Which team has an edge?

Patrick Mahomes and the Chiefs will be tested against an extremely talented Eagles team in Super Bowl LVII.

Sports2 hours ago

With Brady gone, what’s next for Buccaneers?

Now that quarterback Tom Brady is retired, Tampa Bay has to completely re-think its roster and approach, not only for...

Sports3 hours ago

LIVE: Mason Gillis’ record night leads No. 1 Purdue basketball over Penn State

The top-ranked Purdue Boilermakers try to extend their Big Ten Conference lead when Penn State visits.

Sports3 hours ago

Grant Williams raves about Celtics ball boy’s speed after fast-break close call

During an otherwise drama-free night for the Celtics at TD Garden, ball boy Octavio Cruz provided the entertainment when he...

Sports4 hours ago

OSU’s Ryan Day: Marvin Harrison Jr. knocked unconscious on non-targeting call vs. Georgia

Ryan Day said he "completely disagrees" with the overturned targeting call made against Marvin Harrison Jr. in the Peach Bowl.

Technology Hot News

Technology2 weeks ago

Led by "Amazon" and "Microsoft" .. the technology giants are planning to lay off 64,000 employees

After 10 years of driving the stock market bull run, big tech companies are racing to downsize staff to adapt...

Technology2 weeks ago

Apple introduces MacBooks with new M2 processors

Yesterday, Tuesday, Apple unveiled MacBooks powered by the new, faster “M2 Pro” and “M2 Max” processor chips, in a surprise...

Technology2 weeks ago

All you need to know about the upcoming Galaxy S23 phones from Samsung

Samsung has officially announced that the (Galaxy Unpacked 2023) event will be held this year on Wednesday, February 1, which...

Technology2 weeks ago

FTX Exchange Announces Hacking and Stolen $415 Million in Cryptocurrency

Bankrupt American cryptocurrency firm FTX announced today, Wednesday, that $415 million in cryptocurrency has been hacked and stolen from the...

Technology2 weeks ago

Because of a "fraudulent tweet"… Elon Musk's trial begins

Elon Musk's trial began Tuesday in San Francisco with the selection of jury members who will have to decide whether...

Technology2 weeks ago

An electric spoon replaces salt and spices, but with conditions

Experts have developed an electric spoon that is able to replace spices and flavors and affect the taste buds in...

Technology3 weeks ago

The biggest dangers of using tracking devices.. so you can escape?

If you spot an unknown Bluetooth tagging device, there are ways to disable the device so it can't track your...

Technology3 weeks ago

New Twitter.. For You tab to web version

The Twitter platform announced that it will bring the new tab (For You), which launched last Tuesday for iPhones and...