Understanding the Upside Surprises in Inflation Data

In the podcast, economist Stephen King discusses the initial controversy surrounding the idea of inflation at the beginning of 2021. He explains that upside surprises in inflation data were observed in the US, UK, and Eurozone, contradicting the expectations of disinflationary pressures due to lockdowns and reduced demand. As the year progressed, inflation trends expanded to various sectors, including goods, services, and wage pressures. King argues that this suggests a broader issue with inflation and raises questions about policy and market responses.