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Inflation Forces Desperate Leaders to Try and Soften the Blow

Central banks are in the driving seat, but it’s political leaders who’ll be left to face angry voters.

A customer counts coins to pay on a fresh produce stall at the market in the Plaza Mayor of Vic, Spain.

A customer counts coins to pay on a fresh produce stall at the market in the Plaza Mayor of Vic, Spain.

Photographer: Angel Garcia/Bloomberg

The price of foods, fuels and other essential items are spiraling ever upward as Russia’s war on Ukraine compounds supply-chain woes stemming from the pandemic. Central banks may be in the driving seat when it comes to tackling inflation, but it’s governments that face the fallout and so are compelled to act. 

While the nature of the problem is global, leaders know that the repercussions will be local. Already we’ve seen demonstrations in France driven by diminishing purchasing power. In the UK, where the governor of the Bank of England warned of “apocalyptic” food-price increases, what’s being called a cost-of-living crisis poses potentially the gravest threat yet to Prime Minister Boris Johnson’s government. In the US, President Joe Biden is pulling out the stops to try and halt the rise of the price of gasoline at the pump ahead of November’s midterm elections.