Inflation Revival: Could History Repeat Itself With A 1970s-Like Inflationary Upswing?

As we look at today’s economic landscape, parallels to the inflationary upswing of the 1970s are emerging, giving reason for caution and showing signs that a soft landing may be overly optimistic. Specific indicators, especially in prominent economies like Germany, hint at a possible re-acceleration of inflation.

The 1970s marked a period of severe inflation, with rates in many developed economies reaching double digits. This inflationary upswing was primarily driven by two oil price shocks, which led to a surge in energy prices. The ripple effects of these price increases were felt throughout the economy, pushing up the cost of goods and services and eroding the value of money.