In a survey at the recent World Economic Forum meet, most respondents ranked a cost-of-living crisis as the most severe global risk over the next two years with inflationary pressures disproportionately hitting those who can least afford it.
While inflation and cost-of-living increases are often used interchangeably, they are different though closely related. While inflation is often blamed for all price increases, this is not always the case.
For example, supply chain issues and labour shortages, not inflation, help to increase prices due to the limited availability of many goods and services. Also, higher wages don’t result in higher inflation. The former is a symptom of the latter rather than a cause.
