IT is more than two years since high inflation returned to the rich world, and the hopes that it will quietly fade are themselves fading.

True, prices are rising more slowly than in 2022, when the price hit 9.1% in America, 10.6% in the euro area and 10.4% globally.

But the view that this was just a passing lurch looks ever less plausible. Britain's rate has been stuck at 8.7% for two months.

American ''core'' prices, which exclude volatile food and energy, are 5.3% higher than a year ago, a rate that has barely fallen for the past six months.

If inflation continues to fester, the effects will quickly be felt in financial markets. Sustained price rises do not affect all asset classes equally, so a relative repricing will be required.

But those one-off profits and losses will not be the only consequence. In the real economy, inflation corrodes trust by continually and arbitrarily redistributing wealth.

In the financial one this corrosive dynamic is less obvious, but just as real.

The World Students Society thanks The Economist.


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