OECD Inflation Rate Hits Highest in 25 Years... Some Expect a Peak

Last November's 5.8% Recorded as 'Highest Since May 1996'

[Photo by Reuters-Yonhap News]

[Asia Economy Reporter Park Byung-hee] Major foreign media reported on the 11th (local time) that the consumer price inflation rates of major countries around the world have soared to the highest levels in 25 years.

The Organisation for Economic Co-operation and Development (OECD) announced that the consumer price inflation rate of its member countries in November last year was 5.8%. This marked the highest level since May 1996. It rose significantly compared to 5.2% in October last year and 1.2% in November 2020.

The price of energy items rose by as much as 28%, becoming a major cause of the rapid price increase. Energy prices also rose more than 3% compared to the previous month, recording the highest monthly increase since June 1980. Food prices increased by 5.5%.

The inflation rates individually announced by OECD member countries also remain at high levels.

The consumer price inflation rate in the Eurozone, released last week by Eurostat, the statistical office of the European Union (EU), recorded 5% in December last year, breaking the highest record since the related statistics began in 1997. The inflation rate in the United Kingdom reached 5.1% in November, marking the highest level since September 2011.

It is expected that the U.S. consumer price inflation rate for December last year, to be released on the 12th, will record 7%.

As the inflation trend continues, pressure for central banks to tighten monetary policy is expected to increase. Joachim Nagel, President of the Bundesbank, Germany’s central bank, recently voiced criticism of the European Central Bank (ECB), which has been relatively passive in tightening compared to the U.S. and the U.K.

President Nagel said, "Many consumers are worried about weakening purchasing power," adding, "As prices rise, questions are being raised about whether the ECB’s very loose monetary policy is appropriate, and if so, how much longer it should continue." He added, "High inflation may last longer than economists have anticipated."

However, there is also a growing outlook that inflation in major advanced countries has reached its peak.

Ben May, an economist at Oxford Economics, said, "Inflation rates in the U.S. and Europe appear to have nearly peaked, and inflation rates in Canada and the U.K. are expected to peak around April," adding, "Inflation rates in advanced countries will sharply decline this year."

Sylvia Adagna, an economist at Barclays, also said that Eurozone inflation "appears to have peaked at the end of last year." However, she added, "Inflationary pressure may continue for the next few months as companies pass on the increased production cost burden to consumers by raising product prices."

This content was produced with the assistance of AI translation services.