Surging Energy Prices Drive Global Inflation

Food costs, up 83% in 3 years, also slap worldwide economies
By Jim O'Neill,  Newser User
Posted Apr 10, 2008 12:00 PM CDT
A fruit vendor waits for customers in Jammu, India. The government is battling rising inflation.   (AP Photo/Channi Anand)
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(Newser) – Inflation in Europe and the US is projected to reach its highest point since 1995, the Wall Street Journal reports, with food prices up 83% in three years and rising energy and transportation costs. The International Monetary Fund predicts the US and Europe will see inflation of 2.6% this year, with consumer prices in developing countries rising 7.4%.

An interwoven global economy that once served to keep prices low by providing cheap labor from emerging economies is now helping to drive inflation as wages begin to rise worldwide. Add to that a dramatically weakening US dollar affecting currencies pegged to the greenback, and the upward pressure on prices increases as US imports get more expensive.