8 May 2024
Three years after the initial economic disruptions of 2021 and 2022, the lingering effects of those events are still significantly influencing inflation rates in 2024. The primary driver of the current inflation, particularly in the shelter sector where rents and homeowners’ equivalent rent have increased by 6.1% annually, stems from these past disruptions. According to Goldman Sachs economist Ronnie Walker, this persistent high inflation is more about “lagged catch-up” rather than a new wave of increases, suggesting that once these residual effects dissipate, inflation is expected to stabilize without further severe economic consequences. This pattern is also evident in other sectors, such as motor vehicle insurance, which has seen a 22.2% rise over the last year.