What is Headline Inflation: Measurment, Examples, Causes & Effects

What Is Headline Inflation?

How Is Headline Inflation Measured?

What Is the Impact of Headline Inflation on the Economy?

What Are the Causes of Headline Inflation?

What Are Some Examples of Headline Inflation?

How Can Headline Inflation be Controlled?

FAQs About Headline Inflation

What are the effects of headline inflation? up-arrow

Headline inflation can have a significant impact on the economy, as it can affect the purchasing power of consumers and the cost of production for businesses. High levels of headline inflation can lead to a decrease in consumer purchasing power, as wages may not keep up with the rising cost of goods and services. 

High levels of headline inflation can also lead to an increase in the cost of production for businesses, which can lead to higher prices for consumers and lower profits for businesses.

What is the difference between headline inflation and core inflation? up-arrow

Headline inflation measures the overall change in the price level of goods and services in an economy. Core inflation, on the other hand, is a measure of inflation that excludes certain volatile items, such as food and energy prices. The purpose of measuring core inflation is to obtain a more accurate picture of underlying inflation trends by removing the volatility caused by these items.

What are the major causes of inflation? up-arrow

Here are 2 major causes of inflation:

  • Demand-pull Inflation

Demand-pull inflation occurs when the overall level of demand for goods and services in an economy exceeds the available supply, leading to an increase in prices.

  • Cost-push Inflation

Cost-push inflation occurs when the cost of production for goods and services increases, leading to higher prices for consumers.