5 things to know about inflation

It's worth noting that high asset prices and rising price inflation aren't the same thing

To understand why inflation is so worrying to so many people, you could look at price charts for lumber or used cars or New York strip steaks. There is no doubt that the prices of many of the things that people buy are rising at an uncomfortably rapid rate.

Ultimately, most money is a mere electronic entry in the ledger of a bank. It is worth only what it will buy, and what it will buy changes all the time. When prices move abruptly - as when an economy that has been partly shut down for more than a year tries to reboot - that inherent uncertainty becomes all too real.

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A version of this article appeared in the print edition of The Sunday Times on June 06, 2021, with the headline '5 things to know about inflation'. Subscribe