inflation, consumer price index (CPI), demand-pull, cost-push, index numbers
As shown in Figure 1, the UK inflation rate reached 10.1% in July 2022, its highest level for over 40 years. It was widely expected to rise further later in 2022. In this article, we will consider what inflation is and how it is measured, what causes inflation, and why it has reached such high levels recently. We will also consider why it is a problem as well as what can be done to reduce it.
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