A year’s worth of inflation in a single month

A recent study suggests inflation could be a much bigger problem than many people think. Markets are certainly not pricing it in. John Stepek explains why prices have shot up, and why it matters.

People in a supermarket © Richard Baker / In Pictures via Getty Images
Shopping basket prices have shot up in a way that we haven’t seen for years. © Getty
(Image credit: People in a supermarket © Richard Baker / In Pictures via Getty Images)

Inflation in the UK fell to a four-year low last month. Year-on-year, prices (as measured by the Consumer Prices Index), rose by just 0.5%. Sounds like inflation is something we don’t need to worry about. But I’m not so sure.

Another study came out the other week that suggests it could end up being a much bigger problem that we might expect right now. Here’s what it says.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.