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
Discover stories from this section and more in the list of contents
Explore the editionMore from Leaders
Mario Draghi’s best ideas are those Europe finds least comfortable
The danger is that it picks the easy ones
The Labour government’s worrying lack of ambition in Europe
Sir Keir Starmer is trapped by the mindset of the post-Brexit years
A make-or-break moment for Mexico
In America’s biggest trading partner the rule of law and democracy are under attack
The real problem with China’s economy
The country risks making some of the mistakes the Soviet Union did
What to do about America’s killer cars
The country’s roads are nearly twice as dangerous as the rich-world average. It doesn’t have to be that way
How to deal with the hard-right threat in Germany
As extremists win more votes across Europe, forming moderate and effective governments is getting harder