Fact or fiction: Are rising commodity prices behind higher inflation?

Is it the dawn of a new supercycle?

clock • 3 min read
Xian Chan

Xian Chan

As the economic recovery accelerates, a lot has been said about commodity prices and whether we are seeing the dawn of a new “commodities supercycle”.

At face value it is easy to assume this is at the heart of the recent pick-up in inflation, as conventional wisdom suggests that higher commodity prices automatically mean higher consumer prices. But as ever, the reality is more nuanced.  Soaring commodities There are several factors contributing to the rally in the price of commodities. First, there has been a strong recovery in demand, after a period of low activity in 2020. This is also known as the 're-basing' effect commentators often speak about.  Boom and bust: What impact has Covid-19 had on commodities cycle? Second, the...

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