What is the cost of lower inflation?

Business Daily

BBC

News, Business

4.4 • 796 Ratings

🗓️ 3 February 2023

⏱️ 18 minutes

🔗️ Recording | iTunes | RSS

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Summary

With food and heating prices going up, and wages not rising at the same rate, there is pressure on central bankers across the world to tackle inflation. But is this the right approach? And can it be done without crashing the economy?

Ed Butler hears from parents at a cheerleading class in Castleford in northern England, who are concerned about rising prices. They say it is the food shopping where they have noticed the price rises – with one parent shopping online to stop children asking for more items.

Jason Furman, a Harvard professor and President Obama's chief economic adviser, explains how we have reached this position – largely as a result of the pandemic and resulting government responses, and the invasion of Ukraine.

Former Federal Reserve economist Claudia Sahm explains how prices are rising for the core essentials - hitting poorer households disproportionately which is an issue for the whole economy.

And why do we have a 2% inflation target? Mohamed El-Erian, veteran economist and president of Queen’s College, Cambridge, talks about the historical factors around this 'desirable' number.

Presenter/producer: Ed Butler

(Photo: Woman with shopping basket. Credit: Getty Images)

Transcript

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0:00.0	Love, Janessa, a brand new true crime podcast from the BBC World Service and CBC Podcasts.
0:07.2	It's a story about love, deceit and survival, and it's available now.
0:12.1	Find out more at the end of this podcast.
0:17.5	Hi there, my name's Ed Butler. Welcome to Business Daily from the BBC.
0:22.2	Coming up, the daily struggle felt by millions of people everywhere.
0:27.1	With food and heating going up, wages staying stuck.
0:31.9	We try to not put the heating on, but it's my children that I worry about
0:37.1	and I don't want them to get
0:37.9	cold in the middle of the night, but you don't want to get in debt either.
0:41.9	In today's show, we're looking at the challenges facing central bankers how to curb all these
0:47.8	rising prices without crashing the economy as well. They can get inflation down, but they can do it in a very painful way.
0:56.5	The whole purpose of the Fed is to stabilize the economy for everyone.
1:03.6	The year ahead and what we need to pay for lower inflation.
1:08.5	That's Business Daily from the BBC.
1:18.9	So let's do me, both a match at the same time, ready?
1:21.3	Five, six, a magic round.
1:22.2	Up, jack, up, jack.
1:22.8	Up, down.
1:26.8	A keen group of children, some just a few years old,
1:33.4	gathering in shiny suits and pom-poms to learn how to dance and wave to a synchronized beat.
1:44.8	This cheerleading class for kids and toddlers is taking place at Castleford Rugby Club in Northern England.
1:48.2	It's popular with the young ones, but parents love it too.
	...

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