The spread of inflation from energy to other components

Rationale Inflation has risen continuously since December 2020. The increase was initially confined to the energy component, but has subsequently spread to food and the other components. It is important to understand the extent to which the spread of inflation is the result of higher energy prices. Takeaways •The influence of energy prices on underlying inflation has increased. •This is partly due to the larger size of recent shocks, but also to an intensification of the pass-through of the changes in energy prices to other consumer prices.