Climate Change Will Speed Up Inflation in Next Decade, ECB Says
- Weather may boost annual food inflation as much as 3.23ppts
- Risks to price stability mean policy makers will need to react
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Climate change will increase global inflation by as much as one percentage point every year as food costs climb, according to new research from the European Central Bank.
In a report published this week, analysts predicted rising temperatures mean annual inflation will be between 0.32 to 1.18 percentage points higher by 2035. That will create problems for consumers as well as policy makers, with the ECB’s target to keep inflation at 2%.