5.8%: The highest inflation in the OECD area in 25 years

Inflation in the OECD area surged to 5.8% in the 12 months to November 2021, compared with 5.2% in October, and just 1.2% in November 2020, reaching the highest rate since May 1996, the OECD announced. “The rise was particularly marked in the U.S., where year-on-year inflation climbed from 6.2% in October to 6.8% in November, the highest rate since June 1982. In the euro area, inflation also increased strongly to 4.9% in November, from 4.1% in October and minus 0.3% a year earlier, although it remained lower than in the OECD area as a whole,” read the OECD statement.

Energy prices soared by 27.7% in the OECD area in the year to November, more than three percentage points higher than in October (24.3%) and the highest rate since June 1980, it said. “Food price inflation in the OECD area picked up strongly to 5.5% in November, compared with 4.6% in October. Excluding food and energy, OECD year-on-year inflation rose more moderately, to 3.8%, compared with 3.5% in October, though it contributed significantly to headline inflation in a number of large economies.”

Here are headlines from OECD statement:

>> In November, year-on-year inflation increased in all G7 countries, except in Canada where it was stable at 4.7%, and with a wide range of different inflation rates among them.

>> While year-on-year inflation increased in November to 6.8% in the U.S. (from 6.2% in October), it rose to 5.2% in Germany (from 4.5%), to 4.6% in the UK (from. 3.8%), to 3.7% in Italy (from 3.0%), to 2.8% in France (from 2.6%) and to 0.6% in Japan (from 0.1%).

>> Differences in overall inflation rates across G7 countries were largely related to differences in inflation rates excluding food and energy. Non-food and energy items were the main contributors to overall inflation in the U.S., the UK, and Germany where it contributed 4.3, 3.3 and 2.7 percentage points to the inflation rate, respectively. Their contributions were more limited in France and Italy (both by 0.9 percentage points).

>> In all G7 countries, inflation between November 2020 and November 2021 was largely driven by increases in energy prices, contributing to overall inflation from 1.2 percentage points in the UK to 2.6 percentage points in Italy. Food price increases were lower than overall price increases in all G7 countries except in Japan.

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