Worrying about the US inflation outlook

In October 2021, the US 12-month CPI inflation rate reached its highest level in the US since 1990, 6.2 per cent year-on-year. Pent-up demand and higher energy prices have been a major factor in the increase but supply chain shortages and increases in other commodity prices also explain more recent increases (see Sanchez Juanino, Macchiarelli and Naisbitt, 2021).

What next after the largest month on month rise in the CPI since April 1993

CPI Inflation rose to 4.2% from the previous months 3.1%, slightly higher than we had expected. The anticipated twin effects of the increase in the OFGEM price cap and an increase in the VAT rate on hospitality (partially reversing the July 2020 reduction) both impacted the figure as did surging petrol and diesel prices. Since there was a base effect of 0% dropping out from September 2020, all the change in headline inflation in October arises  from the new inflation in the month September to October 2021 which represents the largest month on month increase since April 1993.

CPI Inflation, September 2021

CPI Inflation fell to 3.1% from the previous months 3.2%.  Inflation was expected to fall as there was a “base effect” of -0.4% as the increase in inflation in August-September 2020 dropped out (this spike of 0.4% was partly due to the rebound from the Eat Out to Help Out and VAT cut in August 2020).  However, in addition to this base effect, there was a significant element of new inflation, with prices rising by 0.3% between September and August. This followed from a very sharp rise of 0.7% in July-August.

How well do community evidence-based interventions scale up to other communities?

In a previous blog, we wrote about the importance of establishing an evidence base for interventions and identified funding as a key issue.  This has been exacerbated by the COVID-19 pandemic.  How can services provide the best possible evidence-based interventions if the funding for service delivery and evaluation is not available? 

As furlough comes to an end, recruitment procedures are not fit for purpose for older workers

Johnny Runge (Senior Social Researcher, NIESR) & Rose Lasko-Skinner (Demos)
“I just feel that some people are of the opinion that you’re not fired up, you’re not ambitious. I think it’s hard for someone to understand that… I’m nearly 60, but I’m still ambitious.” – Interview participant, woman, 59, working in retail, Yorkshire and the Humber.

Covid economic recovery: US sprint, Italian marathon?

Our recently published Global Economic Outlook included an upward revision to our projections for global GDP growth this year and next.  Across countries, however, there is considerable divergence in the projected dates at which they will recover their pre-pandemic GDP levels.  Output has already recovered its level from before the pandemic struck in China and the US.  But the US is the only one of the G7 economies to have achieved that so far. 

CPI Inflation, August 2021

CPI inflation rose by a large amount (1.2%) and is now at 3.2%.  Part of this increase was due to the “base effect” of the 0.4% fall in inflation last year (July-August 2020) dropping out of annual inflation. The fall in July-August 2020 reflected the Eat out to Help out Scheme and the reduction in VAT for the hospitality sector. However, in addition to this was a very large element of new inflation, with prices rising by 0.7% between July and August.


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