Inflation in the OECD area at its highest in 25 years

The consumer price index climbed to 5.8% in November 2021.

Inflation in the OECD area increased markedly to reach 5.8% year-on-year in November 2021, after 5.2% in October and only 1.2% in November 2020, reaching the highest rate since May 1996 The rise was particularly marked in the United States where year-on-year inflation rose from 6.2% in October to 6.8% in November, the highest rate since June 1982. In the euro zone, inflation also rose sharply to 4.9% in November, after 4.1% in October and minus 0.3% a year earlier. However, it remained lower than that of the OECD area as a whole.

Over one year, energy prices in the OECD area increased significantly to reach 27.7%, more than 3 points more than in October (24.3%). This is the highest energy inflation rate since June 1980. Food price inflation in the OECD area also rose sharply to 5.5% in November, after 4.6%. % in October. Excluding food and energy, year-on-year inflation in the OECD area increased more moderately to 3.8%, from 3.5% in October although it contributed significantly to headline inflation in some number of big savings.

In November, year-on-year inflation increased in all G7 countries except Canada where it was stable at 4.7%. However, the inflation rates achieved are very different from one country to another.

While year-on-year inflation reached 6.8% in the United States (after 6.2% in October), it rose to 5.2% in Germany (after 4.5%), to 4.6 % in the United Kingdom (after 3.8%), 3.7% in Italy (after 3.0%), 2.8% in France (after 2.6%) and 0.6% in Japan (after 0.1%). Differences in headline inflation between G7 countries have been largely linked to differences in inflation excluding food and energy. Non-food and energy products were the main contributors to headline inflation in the United States, the United Kingdom and Germany, where they contributed 4.3, 3.3 and 2.7 points respectively to the inflation rate. Their contributions were more limited in France and Italy (0.9 points in both cases).

In all G7 countries, inflation between November 2020 and November 2021 was largely fueled by rising energy prices, which contributed to headline inflation by 1.2 points in the United Kingdom and up to 2.6 points in Italy. Food price increases have been lower than overall price increases in all G7 countries except Japan.

In the euro area, headline inflation (measured by the HICP) reached 4.9% in November 2021, after 4.1% in October, mainly due to price increases in Germany, France, Italy and Spain. Excluding food and energy, inflation in the euro area rose sharply to 2.6%, after 2.0% in October. Eurostat’s flash estimate for December 2021 indicates a slight increase in headline inflation (to 5.0%) and a stable 2.6% inflation excluding food and energy.

Year-on-year inflation in the G20 area increased to 5.9% in November 2021, from 5.3% in October. Among the non-OECD G20 economies, year-on-year inflation rose sharply in China (2.3%, after 1.5% in October). It also increased in South Africa (5.5%, after 5.1%), Russia (8.4%, after 8.1%), India (4.8%, after 4.5%) , and Saudi Arabia (1.1%, after 0.8%). In contrast, year-on-year inflation was stable in Brazil (at 10.7%) and Indonesia (at 1.7%), and it declined slightly in Argentina (51.2% after 52.1%) .

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