Cost of Living Crisis Deepens: Why Everything Keeps Getting More Expensive

Conversely, cost-push inflation also plays a crucial role in the annual increase in living expenses. This type of inflation arises when the costs of production for businesses increase. These costs can include higher prices for raw materials, increased wages for labor, and rising energy prices. When businesses face higher input costs, they often pass these expenses on to consumers in the form of higher prices for their goods and services to maintain their profit margins. For example, if the price of oil rises, transportation costs increase, which can then lead to higher prices for a wide range of goods that rely on transportation for their distribution. Similarly, increases in the cost of raw materials like metals or agricultural products can directly impact the prices of manufactured goods and food.